The Tax Court has disallowed a denial of fraud by a corporation. In the case, the corporation’s president and sole shareholder was criminally convicted for willful failure to collect and pay employment and withholding taxes. The corporation wanted to claim that is temporary workers were actually employees of its clients. However, the conviction of the president prevented the corporation from arguing the claim and denying fraudulent intent. As a result, the corporation was ordered to pay fraud penalties.
Points of Interest
- Fishermen, tourist resorts, hotels, retailers and other businesses on the Gulf Coast are taking a beating trying to endure the loss of tourism, fishing, and the loss of business.
- The guidance issued by the IRS reminds the taxpayer that such wages are still taxable despite the disaster, just as the income would have been taxed had the spill not happened at all.
- While the payments from BP and the federal and state governments are payments that the victims deserve for their losses, the fact is that a lot of the payments made are still taxable as they would be had the spill not happened at all.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors