IRS raids business and owner's home, claims tax evasion

Two raids in one day. The Internal Revenue Service (IRS) decided to raid both a business owners' place of business as well as his private residence on the same day. These were not tax agents clad in black suits carrying briefcases. These were federal agents in full body armor carrying assault rifles gathering boxes of paperwork, computers and phones from both locations.

The reason for the raids? The agency believes the owners failed to file income tax returns for more than ten years and neglected to pay payroll and other taxes for his employees. The agency has stated it is considering criminal charges for tax evasion and willful failure to collect or pay taxes. If the agency successfully pursues these charges, each can come with prison time and hundreds of thousands of dollars in fines.

The allegations are serious. The IRS states the business owners shorted the government of over $1.4 million in Medicare and Social Security payments for employees. Employees may have noticed payments deducted from their paychecks. According to the government, those deduction never went to Medicare or Social Security. Instead, they state the business owners failed to transfer the payments to the government.

Were the raids a surprise?

It appears not. Employees of the restaurant had received mailings from the IRS stating the owed the IRS money for taxes not paid during employment at the restaurant. As a result, it is likely the owners were receiving similar correspondences.

The case is an example of the importance of taking correspondences from the IRS seriously. Do not ignore mailings from the agency. Review them and if seek legal counsel as needed.

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