There was sufficient evidence to convict a highly skilled tax attorney and sophisticated businessman of willful failure to pay over withheld employment taxes. The evidence at trial fairly established that the individual possessed superior knowledge of tax and corporate laws, which he used to keep the IRS from collecting taxes due for various businesses he controlled, by shifting assets and employees among the several entities.
The individual never disputed that the employment taxes at issue were unpaid. Moreover, the government’s evidence showed that, for a period of more than 10 years after he purchased his business, the individual continually failed to pay employment taxes withheld from employee wages, often blaming the failure to pay taxes on the poor financial condition of his businesses while authorizing large sums to pay for improvements to the property and, therefore, increasing his investment. Thus, the jury reasonably concluded that the individual’s conduct showed intent to willfully avoid paying as much of the amount owed as possible.
Further, the government produced an overwhelming amount of evidence to show that the individual was the person responsible to collect, account for and pay over employment taxes for the employers. The individual’s partner testified that the individual controlled deposits into payroll accounts, opened bank accounts, decided which bills to pay, approved payroll, prepared the payroll tax returns, and was responsible for paying over the taxes to the IRS. In addition, nearly every exhibit produced at trial was a tax form completed by the individual or correspondence between the IRS and the individual related to the unpaid employment taxes of the individual’s entities. (S.J. Lynch, DC Pa., 2017-1 ustc ¶50,116.)
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