Several business owners in Pennsylvania have pleaded guilty to various charges of employment tax fraud, according to a recent report by Forbes.com. The article, published on November 16, 2023, reveals how these owners evaded paying taxes on their employees’ wages and benefits, resulting in millions of dollars in losses for the government and the public.
How They Did It
According to the Forbes article, the business owners used different methods to avoid paying their fair share of employment taxes, such as:
- Failing to file tax returns or filing false returns that understated their income and expenses
- Paying employees in cash or using third-party payroll services that did not withhold or remit taxes
- Creating shell companies or using nominees to conceal their ownership and control of their businesses
- Transferring assets and income to family members or other entities to avoid tax liens and levies
Some of the business owners also engaged in wire fraud, identity theft, and money laundering to further their schemes and obstruct the investigation by the Internal Revenue Service (IRS).
Who They Are
The Forbes article names some of the business owners who have pleaded guilty to employment tax fraud in Pennsylvania, such as:
- Samuel Bullock, 72, of Langhorne, PA, who operated a construction company called Bullock Construction. He admitted to failing to pay more than $1.2 million in taxes for his employees from 2009 to 2018. He also used his spouse’s name and Social Security number to set up a sole proprietorship and divert his business income to avoid IRS collection actions. He faces up to six years in prison and a fine of up to $500,000.
- Brian A. VanDusen, of Pittsburgh, PA, who ran a tax preparation company called Easy Tax Refund. He confessed to preparing and filing hundreds of false tax returns for his clients and himself from 2014 to 2018, resulting in illegal refunds of more than $400,000. He also wired some of the fraudulent refunds to his personal bank accounts and used them for his own benefit. He faces up to six years in prison and a fine of up to $500,000.
- Michael A. Kuryllo, 54, of Scranton, PA, who owned and operated several businesses, including a roofing company, a restaurant, and a car wash. He acknowledged that he failed to pay more than $800,000 in taxes for his employees from 2013 to 2017. He also paid some of his employees in cash and used a third-party payroll service that did not remit taxes to the IRS. He faces up to five years in prison and a fine of up to $250,000.
Why It Matters
Employment tax fraud is a serious offense that harms not only the government, but also the employees and the public. As the Forbes article explains, employment taxes fund vital programs such as Social Security, Medicare, and unemployment insurance. When employers fail to pay these taxes, they deprive their employees of their future benefits and put the financial stability of these programs at risk. They also create an unfair advantage over honest businesses that comply with the tax laws and contribute to the common good.
The IRS and the Department of Justice are committed to pursuing and prosecuting employment tax fraudsters and holding them accountable for their actions. They also encourage taxpayers to report any suspected cases of employment tax fraud to the IRS Criminal Investigation Division or the Tax Division of the Department of Justice.
