A cautionary tale with taxes

A cautionary tale with taxes
On Behalf of Mockensturm, Ltd | Sep 09, 2016 |

As a business owner, you likely have a great many matters you must deal with every day. Competing in a crowded and busy marketplace is a full-time job and how to market your business, hire and train your employees, attract new customers while keeping the ones you already have and maintaining your compliance will all of the legal and regulatory requirements that affect your business is no small feat.

These issues can become truly overwhelming if you suffer some type of setbacks, like an illness or other medical condition. Suddenly, you may have significant medical expenses and a loss of income due to your reduced capacity to work. You may attempt to solve your financial issues by moving revenue around within your business to deal with demands from vendors or customers as best you can. But whatever you do, don’t short your tax payments in the misguided belief they are just like any other bill you need to pay.

A garden store owner in Lima has plead guilty to seven felony counts, including various violations of failing to file income tax monthly, filing of an incomplete return, failure to pay state income taxes and failure to withhold employment taxes.

While it may seem like a good idea, and you may intend to catch up all of the delinquent payments, the consequence of such actions often snowball into a blizzard of interest and penalty payments on top of the existing tax payments that can quickly become overwhelming. In addition, the failure to withhold payroll taxes is treated as theft because the tax authorities consider these as funds held in trust for your employees.

Should a financial disaster strike your business, you should keep in mind the importance maintaining your compliance with all the applicable tax laws, as the consequence can be felony charges and criminal penalties. In this case, the business owner was placed in a diversion program, to allow him to repay the delinquent taxes. If that fails, he could be sent to jail.

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