Business Owner – 80 Mths in Prison for Payroll Tax Fraud

by | Jan 15, 2026

A Virginia business owner was sentenced to 80 months in federal prison for failing to pay over employment taxes withheld from his employees. Over several years, he kept the taxes instead of sending them to the IRS, causing a $3 million tax loss.

The IRS considers unpaid payroll taxes one of its most serious violations because the money is taken from employees’ paychecks. When employers don’t remit those funds, the IRS treats it as theft — and prosecutes aggressively.

The Lesson for Taxpayers

If you’re behind on payroll taxes, ignoring the problem does not make it go away. Payroll tax cases routinely lead to:

  • Criminal charges
  • Prison time
  • Business closures
  • Personal liability through the Trust Fund Recovery Penalty

The IRS prioritizes these cases, and with stronger enforcement tools, they’re identifying noncompliant employers faster than ever.

If you’ve fallen behind — even due to cash flow issues — now is the time to get help. A proactive resolution can sometimes mean the difference between a payment plan and a criminal case.

At Jablonsky Tax Relief, we help small business owners get back into compliance the right way — before it becomes a criminal case.

If you’ve fallen behind, reach out before the IRS reaches out to you.  Give us a call today at (972) 821-1991 or reach out to us at https://Jablonskytaxrelief.com/ and Click Schedule A Free Consultation to get on our calendar. 

author avatar
Bob Jablonsky

Start Your Tax Relief Journey with Bob Jablonsky, EA and CTRS

Follow the prompts below to schedule a free case evaluation! During the evaluation we'll discuss your specific situation and create an action plan to end your tax problem!