A 67-year-old Omaha man was sentenced to ten months in prison for failure to pay withholding and Social Security taxes in excess of $170,000.
Daniel Malone was sentenced in United States District Court in Omaha for Failure to Pay Withholding and F.I.C.A., (Social Security), taxes in the amount of $170,967.13.
After his release from prison, Malone will begin a term of supervised release for one year. Malone was also ordered to pay a $25.00 special assessment and a fine in the amount of $3,000.00, plus interest. Restitution in the amount of $170,967.13 was also ordered.
An investigation by the Internal Revenue Service showed that during 2005 and 2006 Malone was the owner, managing member, and operator of A.G. Ventures LLC, (AGV), as well as Investment Property Resources, (IPR), both businesses located in Omaha. During this period, Malone collected federal withholding and FICA taxes from his employees and failed to pay the taxes to the Internal Revenue Service.
The employer’s quarterly income tax returns, specifically Forms 941, were filed for AGV and IPR, but the corresponding deposit payments were not made as required. Malone was fully aware of his employment tax obligations as demonstrated by his prior compliance in previous years with regard to the payment of the employment taxes.
"IRS Criminal Investigation takes these violations of law very seriously," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service."