Court Enters Judgment Against Pontiac, Mich., Law Firm and Permanently Enjoins the Firm from Continuing to Pay Wages to Employees Without Paying Associated Payroll Taxes
On April 3, 2014, a U.S. District Court for the Eastern District of Michigan in Detroit issued a judgment against the law firm Hatchett, DeWalt & Hatchett PLLC in the amount of $122,994.12 for unpaid federal employment and unemployment taxes and penalties for late filing partnership income tax returns for various tax periods from 2003 to 2012.
The Honorable Robert H. Cleland also entered a stipulated order of permanent injunction requiring Hatchett, DeWalt & Hatchett PLLC to file all employment, unemployment and partnership tax returns on a timely basis, to deposit all due taxes in an appropriate federal depository bank and to pay all required liabilities due on each return on a timely basis. The order enjoins the law firm from assigning property or making any payments until the employment tax and withholding liabilities are first paid to the Internal Revenue Service (IRS). It also requires the law firm to provide monthly affidavits to the IRS verifying that the requisite tax deposits have been made in a timely manner.
The permanent injunction order was issued in response to the Feb. 4, 2014, suit filed by the Department of Justice, alleging that Hatchett, DeWalt & Hatchett PLLC had been engaged in a practice known as “pyramiding,” whereby a business withholds taxes from its employees but intentionally fails to remit them to the IRS as mandated by law.