Sunil Chawla (“Chawla”), age 66, of Berlin, Maryland, pleaded guilty this week to tax fraud. …
Owner of Iberia Restaurants in Newark Found Guilty of Tax Crimes
The failure to file and pay payroll taxes has been a major focus of IRS investigations in the past few years. Sometimes the cases are civilly examined, but occasionally the government criminally prosecutes more willfull taxpayers. A New Jersey man recently admitted failing to withhold and pay over payroll taxes stemming from his ownership of two well-known Newark restaurants.
Jorge Fernandes, 76, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Christine P. O’Hearn to an information charging him with two counts of failing to collect payroll taxes for the tax period of 2016 through 2017.
According to documents filed in this case and statements made in court:
Fernandes was the 50-percent owner of two restaurants in the Ironbound section of Newark, Iberia Tavern and Iberia Peninsula. Fernandes was fully aware of his legal obligation to collect payroll taxes from the restaurants’ employees, but instead paid a number of the employees “off the books,” or “under the table,” failing to collect any payroll taxes from them. Fernandes’ conduct caused the government a total tax loss of $715,780 for tax years 2016 through 2017.
The failing to collect payroll taxes charges to which Fernandes pleaded guilty each carry a maximum penalty of five years in prison and a $10,000 fine. Sentencing is scheduled for Nov. 20, 2023.
The case is a painful reminder that the failure to file and pay payroll taxes has been a major focus of the IRS. All clients and taxpayers should be careful in this area.
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