If you are an employer, you have an obligation to withhold certain taxes from the wages of your employees. Though there are exceptions, failure to do so could lead to audits and penalties from the IRS.
However, withholding taxes is only one part of meeting your obligations as an employer. You must also deposit and report those taxes to stay in compliance with federal tax laws. If you fail to complete any of these obligations when required, you could face incarceration and hefty fines.
One case that highlights the importance of complying with each of these obligations was recently resolved in another state. According to news reports, the co-owner of an entertainment complex was convicted of various tax law offenses stemming from multiple missteps in managing his company’s taxes.
More specifically, he was convicted of failing to pay nearly $800,000 in taxes collected from employees to the IRS. He was also convicted of failing to properly collect and account for the employment taxes for which he was responsible. Evidently, these failures continued over a period of about four years and he was convicted of 16 counts of tax-related violations.
While he has yet to be sentenced, he could face several years of incarceration and probation, not to mention fines for each of the 16 counts of which he was convicted.
This case should serve as a very real reminder that employment taxes must be withheld, collected, deposited and reported in accordance with strict laws. If there are any problems detected by the IRS, an audit can be conducted and penalties can be issued. Rather than face this upsetting situation, employers in Atlanta would be wise to consult a tax law attorney to ensure they are in compliance with state and federal laws. Should issues arise, dealing with them sooner rather than later will generally be best.