Two Tax Shelter Promoters Found Guilty in Billion-Dollar Syndicated Conservation Easement Tax Scheme
Defendant convicted of failing to pay over more than $790,000 in payroll taxes
A Pittsburgh, Pennsylvania, man was convicted today by a federal jury in the U.S. District Court for the Western District of Pennsylvania of 16 counts of failing to collect, account for and pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
According to the evidence presented at trial, between 2004 and 2015, Steven Lynch, a tax attorney, co-owned and operated the Iceoplex at Southpointe, a recreational sports facility located in Washington County, Pennsylvania. The Iceoplex included a fitness center, ice rink, soccer court, restaurant and bar. Lynch controlled the finances for these businesses and was responsible for collecting income and employment taxes withheld from employee wages, accounting for these taxes and filing Forms 941, payroll tax returns, and paying these taxes over to the Internal Revenue Service (IRS). The jury found that between 2012 through 2015, Lynch failed to timely pay over to the IRS more than $790,000 in taxes withheld from the wages of the employees for these businesses.
“Employers are entrusted with collecting the taxes withheld from their employees’ wages, and they have an absolute legal obligation to pay that money over to the IRS,” said Principal Deputy Assistant Attorney General Ciraolo. “The conviction of Steven Lynch serves as a strong reminder to all employers that failure to comply with employment tax obligations has significant consequences, including prosecution and incarceration. The department, together with its partners within the IRS, will continue to vigorously pursue those who violate our nation’s tax laws and threaten the integrity of our tax system.”
“The jury’s verdict is a clear signal that the criminal tax laws of our country are being enforced and upheld for the benefit of all citizens,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Those who attempt to skirt the law will be held accountable.”
Sentencing is scheduled for Jan. 11, 2017. Lynch faces a statutory maximum sentence of up to five years in prison for each count of willfully failing to collect, account for and pay over employment tax, as well as a period of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-CI, who conducted the investigation, and Trial Attorneys Jeffrey Bender and Brittney Campbell of the Tax Division, who prosecuted the case. Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office in the Western District of Pennsylvania for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.