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With the pandemic, many business owners struggled to keep aloat, including paying payroll taxes to the IRS, hoping the day would come when they could catch up but they never could. Not dealing with payroll taxes can result in jail time, fines and penalties and the loss of your business. The IRS has stated this is a top priority and the Department of Justice issued a press release last week of a Kansas woman pleaded guilty today to willfully failing to account for and pay over employment taxes to the IRS.

According to court documents and statements made in court, Sheryl Clanton owned McCorkendale Construction Inc., Clanton was President of McCorkendale from 2006 through 2011 and was responsible for filing quarterly employment tax returns and collecting and paying federal income and Social Security and Medicare taxes withheld from employees’ wages to the IRS. For the first quarter of 2010 through the last quarter of 2011, however, Clanton did not pay approximately $980,536 in employment taxes owed to the IRS.

In 2011, Clanton abandoned McCorkendale due to its outstanding tax obligations and started McClan Construction LLC. From the second quarter of 2012 through the fourth quarter of 2017, Clanton did not pay approximately $1.1 million in employment taxes or file quarterly payroll tax returns as required by law.

Clanton also operated a third underground construction business, NJ Trenching LLC, organized in late 2011. Between 2012 and 2015, Clanton did not report or pay nearly $100,000 of employment taxes owed to the IRS on behalf of NJ Trenching.

Ultimately the IRS caught up to Clanton and now she is scheduled to be sentenced on Dec. 14, and faces a maximum penalty of five years in prison. She also faces a period of supervised release, restitution and monetary penalties.

Many business owners have had the same issues as Clanton, but dealing with them before the IRS catches up to you can result in avoiding jail time, avoiding penalties and keeping your business open. Tomes Law Firm has helped many business owners deal with back taxes and get back on track to making their company successful. Contact the payroll tax resolution lawyers at Tomes Law Firm today for a confidential no charge strategy session at 732-333-0681.