Monday, June 7, 2021

Montana Construction Company Owner & New York Plumbing Contractor Sentenced to15 Months & 20 Months in Prison for Employment Tax Fraud!

We previously posted IRS CONTINUES to Criminally Prosecutes Employers For Failure To Pay Withheld Payroll Taxes - As Promised! where we discussed that the IRS is stepping up criminally prosecuting business owners for failing to turn over withheld payroll taxes.

Now according to the DoJ, a Montana man was sentenced to 15 months in prison for employment tax fraud. According to court documents and statements made in court, 

Trennis Baer, of Great Falls, owned and operated Baer Construction based in Great Falls. Beginning in 2010 and continuing through 2018, Baer did not file quarterly employment tax returns, nor did he pay employment taxes withheld from his employees’ wages to the IRS. Baer did not comply with these legal requirements, even though the company’s outside accountant from at least 2013 on prepared employment tax returns to be filed and calculated the taxes due. In addition to spurning his employment tax obligations, Baer willfully did not file personal income tax returns for the years 2001 to 2006, 2008, and 2010 to 2018. The total tax loss to the IRS from Baer’s conduct is more than $1.5 million. 

In addition to the term of imprisonment, U.S. District Judge Brian Morris ordered Baer to serve two years of supervised release and to pay approximately $935,251 in restitution to the United States.

Also according to the DoJ, a New York man was also sentenced to 20 months in prison for failing to collect and pay over to the IRS $732,462 in employment taxes. 

Sergei Denko, of Queens, New York, owned and operated Denko Mechanical Inc. and Independent Mechanical Inc., both contracting businesses in Queens that specialized in plumbing. According to court documents and statements made in court, from 2010 through 2014, Denko cashed more than $5 million in checks made out to companies he owned and operated to fund an “off the books” cash payroll. 

He did not report the cash wages to the IRS, filed false employment tax returns, and did not pay to the IRS the employment taxes arising from the cash payroll. 

Denko admitted to causing a total tax loss of $732,462 . In addition to the term of imprisonment, U.S. District Judge Rachel P. Kovner ordered Denko to serve one year of supervised release. The defendant has already paid $366,231 in restitution to the United States.  

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