Wednesday, May 6, 2015

Sentencing for Failure to Pay Over Trust Fund Taxes (5/6/15)

We have another reminder that DOJ Tax is serious about prosecuting people who fail to pay over trust fund taxes -- the taxes withheld from employees.  DOJ Tax announced here that Kevin Bertram, a former CEO of a wireless technology firm (Distributive Networks LLC), was sentenced to 30 months and ordered to pay restitution of almost $900,000.  Excerpts from the press release are:
According to court documents, Bertram operated Distributive Networks from 2004 through 2010.  Bertram’s company, which was named one of Washington, D.C.’s “Great Places to Work” by Washingtonian magazine in 2007, created technology that allowed cell phone users to participate in contests, download ringtones and receive content such as trivia and horoscopes.  
According to court documents, Distributive Networks provided employee perks, such as free Starbucks coffee and gym memberships, and a 100 percent matching contribution to its employees’ 401(k) plans.  However, Bertram willfully failed to comply with Distributive Networks’ employment tax obligations.  For the quarterly tax periods in late 2007 through mid-2009, Bertram failed to file Distributive Networks’ required quarterly IRS Forms 941 (Employer’s Quarterly Federal Tax Returns) and failed to pay over $927,921.78 in employment taxes due to the IRS.  At the same time that Bertram was failing to pay the IRS income and other taxes withheld from employees’ paychecks, he spent hundreds of thousands of dollars of company funds on sporting event tickets and personal luxury goods.
I am reminded in another context that Enron used to be rated a great place to work.

1 comment:

  1. ChiTownTaxAttorneyMay 7, 2015 at 4:11 PM


    Please stop bating and publishing anything about Mr. Birkenfeld. He is, in my opinion, plainly disturbed and not offering anything of stubstance. Again, my advice to him would be shut up and go away; you have $104 million reasons to do so.


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