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New York Payroll Tax Fraud Lawyers
Payroll tax fraud involves deliberate actions to falsify or misrepresent payroll taxes associated with wages earned. This falsified information is reported on either the state level, the federal level or both. Typically payroll taxes are due to both the Internal Revenue Service (IRS) as well as to the state of New York. Payroll tax fraud is also referred to as a form of tax evasion in that the person involved has performed such acts with the intent to evade paying the appropriate amount of payroll taxes. These acts can occur by an employer, an employee or a tax preparer. It involves allegations that have very serious consequences if one is found guilty.
Being found guilty of payroll tax fraud can result in fines and penalties, more serious criminal charges and even incarceration. The following are typical payroll tax fraud cases along with what you can do if you are charged with such issues.
1. Consult with an Attorney
If you are involved with payroll tax fraud in any way it is important that you seek the guidance of an experienced attorney who specializes in payroll tax fraud issues. This should take place as soon as possible. It will allow you to reduce the risk associated with such allegations and if needed, obtain legal representation as quickly as possible. An experienced attorney can evaluate your case and determine what needs to take place to protect your rights and your legal interest.
2. Gather Evidence That Support Your Claim
You will need to work very closely with your attorney and obtain all necessary supporting documents that are associated with your case. They can be used to help your attorney best represent and settle your case in your favor. This can be a relatively simple task or it can be very complicated depending on how many years are involved with the alleged payroll tax fraud. For example, wages and salaries may have been reported inappropriately years prior to the allegations that are being made against you which requires more research.
3. Payroll Tax Fraud Committed by Employees
There are times when payroll tax fraud is performed by an employee. This typically takes place when an employee misrepresents their employee payroll records to reduce the amount of payroll taxes owed. This often takes place when an employee completes their W-4 form. This is the form that employees submit to employers so the proper amount of income tax can be withheld from the employee’s paycheck. This is important because these withholdings must be paid to the IRS and the state of New York on a monthly, quarterly, or an annual basis. At the end of the year employers issues a W-2 form to their employees. If fraud has been committed by the employee, the W-2 form will also have misrepresented taxes reported. W2s are also used personal income taxes are prepared. When employees falsify their payroll tax information, it creates a snowball effect that also results in employers reporting and paying the incorrect amount of payroll taxes as well. This happens because employers are required to match certain employee payroll taxes (mainly FICA Taxes). If the employee’s payroll taxes are incorrect, then the employer’s payroll taxes are reported inaccurately as well. Hence, payroll tax fraud committed by employees impacts their payroll taxes that they’re responsible for and the payroll taxes that the employer is responsible for also.
4. Payroll Tax Fraud Committed by Employers
Payroll tax fraud that has been committed by employers often takes place when employers falsify payroll tax returns with the intent to reduce the amount of payroll taxes they are liable for. To that end, employers have also been known to create fake employee records in an effort to receive employee wage benefits and compensation. These actions require the legal expertise of an attorney that specializes in this area of law.
5. Payroll Tax Fraud Committed by Tax Preparers
Payroll tax fraud committed by tax preparers takes place when preparers intentionally falsify or alter payroll tax information when preparing tax returns. This act can take place on behalf of employers by falsifying information reported on payroll tax returns or state monthly, quarterly or annual payroll tax filings. They can also falsify individual employee taxes by modifying their wages earned or taxes paid on their personal income tax returns. This could result in the revocation of any licensing, penalties, fines or imprisonment.
What to do Next
If you have allegedly been charged with payroll tax fraud, the burden of proof is on you to settle your case in your favor. You will need the legal expertise of an experienced attorney to advise you on the next steps to take based on your particular payroll tax issues. This will have a lot to do with whether the opposing party is cooperating or not. Additionally, your attorney may be required to communicate with a judge or the district attorney on your behalf in an effort to settle any criminal fraud charges.