Criminal defense attorneys who focus their practice on criminal tax matters will often deal with personal income tax fraud or evasion. However, prosecutions against business owners for criminal tax fraud is an ever-present threat for entrepreneurs.
In a case that hits awfully close to home, the United States Attorney's Office for the Eastern District of Tennessee recently posted on its website that a local small business owner has pled guilty to filing a false quarterly tax return (Form 941), also known as an Employer's Quarterly Federal Tax Return. Stanley Veltkamp of White Pine, Tennessee was the co-owner of a local Marina in Jefferson County. According to his plea agreement, Veltkamp would pay a portion of his employees' wages in check and a portion in cash in order to have the marina avoid paying its Social Security and Medicare taxes to the United States. Mr. Veltkamp now faces up to three years in prison and a $250,000 fine.
Employers are required to accurately complete a Form 941 and submit it to the IRS each quarter to report its employee's wages. When this form is submitted, employers are to also include a payment consisting of the amount withheld from an employee's paycheck. Failure to comply with federal tax laws could lead to criminal prosecution.