Birmingham Business Owner Pleads Guilty to Tax Fraud

BIRMINGHAM, Ala. – The owner of a Birmingham business pleaded guilty today to tax fraud for failing to pay employment taxes to the Internal Revenue Service that he withheld from employees’ wages over a number of years, announced U.S. Attorney Prim Escalona and  Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office James E. Dorsey.

JAMES MARK BURKETT, 65, of Birmingham, pleaded guilty before U.S. District Judge Anna Manasco to one count of failure to account for and pay over trust fund taxes to the IRS. As part of his plea, he agreed to pay restitution in the amount of $1,592,746.92. Burkett is scheduled for sentencing on April 23, 2023.

“Burkett willfully disregarded his tax obligation,” U.S. Attorney Escalona said.  “Payroll taxes fund Social Security and Medicare and are a large source of revenue for the federal government.  My office will hold accountable anyone who fails to comply with their tax obligations.” 

“Employers have a known legal duty to collect and turn over employment taxes from their employees to the IRS,” SAC Dorsey said. “James Burkett’s guilty plea today should be a warning to employers who willfully fail to comply with their tax responsibilities.”

According to the plea agreement, Burkett is the owner of Superior Coil Service, Inc., a company that manufactures coils for the electric motor repair industry. The IRS reviewed eight quarters for tax years 2016 and 2017. During that time, Superior Coil Service, Inc. paid wages of $1,411,677.23 to employees. From these wages, Burkett withheld federal income, Social Security, and Medicare taxes totaling $273,342.28—none of which were paid to the IRS on behalf of the company or its employees. Burkett also failed to file required forms 941, W-2, W-3, or Transmittal of Wage and Tax statements for the quarters under review.

The maximum penalty for  tax fraud is five years in prison.

The IRS-CI investigated the  case.  Assistant United States Attorney Catherine Crosby is prosecuting the case.