From San Antonio comes word of a company that allegedly took care of small businesses’ taxes in a way that’s, well, arresting. John Bean apparently owned a professional employer organization named “Synergy Personnel.” Most PEOs become the actual employer and, for a fee, they relieve a small business of the duties of personnel including the payment of taxes. Mr. Bean’s company allegedly had a unique and (if proven) very illegal method of dealing with those taxes: They didn’t. The FBI and IRS allege that Mr. Bean’s company kept the money for taxes and workers’ compensation insurance.
Mr. Bean’s company–or should I say companies? Not only is Synergy Personnel allegedly involved in this $110 million tax fraud, but there’s a list of 14 other companies that the FBI and IRS allege are involved. To date, two other individuals who were involved in these entities have pleaded guilty and are cooperating in the investigation.
Mr. Bean was arrested yesterday and is being held in lieu of $100,000 bail. He’s looking at a very lengthy term at ClubFed if found guilty of the charges.
This again brings up the point that employers who use outside payroll companies absolutely need to check to make sure the payroll deposits are being made (you can do this on EFTPS). It’s possible that employers in this case will be far luckier than others. In the usual PEO arrangement, the PEO becomes the employer of record. Assuming that’s the case, that could absolve the ’employers’ of tax liability.
[…] Fox: Not Only Were the Employees Outsourced, The Taxes Went Away, Too. An “professional employer organization” that let employers outsource their payroll […]