$10 Million in Past Due Employment Taxes? Ouch!

past dueA Miami business man will spend two years in prison and still owe a tax bill of almost $10 million.  There has to be a better way.


Employment taxes are one of those can’t-really-be-avoided aspects of operating or owning a business. As we have discussed, employment taxes are collected by employers to fund an array of programs maintained by the federal government. These include federal income taxes, Social Security, Medicare, and unemployment taxes.


When employers fail to pay taxes to the Internal Revenue Service (IRS), they usually forego payment of all of these program taxes. Regular employment taxes represent a significant portion of taxes collected each year by the IRS to fund federal programs. The IRS robustly reinforces regulations around payroll taxes, pursuing employers and employees who unwittingly fall into non-compliance when their employer withholds their due share of these taxes.


Our firm is focused on tax law and helping clients work through sticky situations like IRS audits, criminal tax investigations, and employment tax disputes. We work frequently with business owners who used payroll taxes to ease a stressed bottom line or to fund lifestyle pursuits. The case of Ricardo Betancourt offers a cautionary tale.


Mr. Betancourt owned several businesses in the South Florida area that provided package delivery service. The businesses were successful, pulling in about $100 million per year in gross revenues. The business employed hundreds of workers. Had Mr. Betancourt properly collected and turned over payroll taxes to the IRS, this story would be one of good businesses decisions and a well-earned fortune. Unfortunately, as often happens in these matters, one or two poor choices can snowball, altering the trajectory of a seemingly successful career.


For reasons unknown, starting somewhere around 2009, Mr. Betancourt ceased to turn over his employment taxes to the IRS. After starting down that road, Mr. Betancourt neglected his payroll taxes until 2016, undoubtedly after the launch of an IRS criminal tax investigation.


Already successful in business, Mr. Betancourt used the approximately $10.8 million he withheld from his employees to fund a bucket list of classic cars, Harley-Davidson motorcycles, expensive baubles and payments for plastic surgery.


For the tax crime, Mr. Betancourt will do the time—24 months to be precise, and he will be paying almost $10 million in restitution and penalties, plus probation.


There is a point in tax fraud schemes, offshore tax problems, and other tax controversy where an experienced criminal tax attorney can work to mitigate crime and punishment. For Mr. Betancourt, the help likely came too late. If you are aware of non-compliance anywhere in your organization or personal accounting, speak with a skilled tax lawyer as quickly as possible.


Seasoned tax defense attorneys serving local, national, and international tax clients

Robert J. Fedor, Esq., LLC delivers decisive legal representation on behalf of persons or entities facing challenges including criminal or civil tax audit, or other IRS action. Contact us or call 800-579-0997.


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