Business owner fails to pay $2.4 million in payroll taxes

[Lee B]

"Barry Lee White, a former business owner, has been sentenced to one year and 10 months in federal prison for willfully failing to pay more than $2.4 million in payroll taxes. White, who operated I-Bar Construction, Inc. and T-Line Construction, LLC., withheld over $1.8 million in payroll taxes from his employees between 2015 and 2018 but failed to remit the funds to the IRS.

As the sole operator of the companies, White was responsible for collecting, accounting for, and paying payroll taxes, which included Social Security, Medicare, and federal income taxes. In addition to the employee taxes, he failed to pay more than $600,000 for the employer’s portion of Social Security and federal unemployment taxes.

White pled guilty to the charges on May 7 and was ordered to pay $2,499,473 in restitution. Following his prison term, he will serve three years of supervised release."

[Medlin Software, Dennis]

I always wonder about these. How did it take so long to stop? I can see 12-18 months until an employee files their own return, and failing to match up with an employer depositing, but four tax years? And hopefully for the person or persons who had and access to the bank account(s), they did not get caught up in the fraud, or maybe they took a deal themselves.

We used to have 941M for those caught not doing things properly, now we don't. We used to have to report W4 forms which did not seem right, now we don't. Remember, WH deposits are not on a time basis, WH on Dec 31 paycheck is like having a baby or getting a spouse on Dec 31, it is "good" for the entire year, so some avail of this strategy.

[Lee B]

It's because these cases have to be referred to the U S Attorney in their district for prosecution and then grind through our legal system.

It's the same reason it takes so long to stop fraudulent tax preparers.

The FBI is not going to arrest someone for violations like these.