Willful Failure To Pay Over Employee Payroll Taxes

A conviction for willful failure to pay over employee payroll taxes is affirmed where “willfulness” does not require the government to prove that a defendant had the ability to meet his tax obligations.

In a decision made on August 22, 2008 by the federal court of appeals covering California (the U.S. 9th Circuit Court of Appeals), the court stated:

This case illustrates the enduring truth of Ben Franklin’s sage observation that “nothing is certain but death and taxes.” It is an appeal from a conviction for willful failure to pay over employee payroll taxes, in violation of 26 U.S.C. § 7202. The defendant-appellant, Jack Easterday, sought an “ability to pay instruction” in order to contend to the jury that his failure to pay over the taxes he owed was not “willful,” because he had spent the money on other business expenses and therefore could not pay it to the government when it was due. The district court refused to give the instruction, and Easterday subsequently was convicted and sentenced to thirty months in prison.

Payroll tax problems can have serious consequences. Consult with a qualified tax attorney about your tax problem. Call Mitchell A. Port at (310) 559-5259.