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Iowa businessman charged with fraud, failure to pay over $440,000 in employment taxes

The Des Moines Register
The Des Moines Register
 2022-08-10

A Keswick man is facing tax and bank fraud charges and is alleged to have lied on applications for COVID-19  relief funds , according to court records.

Thomas Sieren, 59, was the vice president of TCS Fabricating, Inc., in Keswick when he allegedly failed to turn over $440,000 to the IRS between 2016 and 2020, according to charging documents.

Sieren also allegedly submitted two Paycheck Protection Program loan applications in which he falsely claimed that the company had employees for whom it paid payroll taxes.

Sieren made an initial appearance in federal court Friday, according to a spokesperson for the Des Moines U.S. Attorney.

The company was required by law to withhold taxes from employee wages and to pay the withheld amounts to the Internal Revenue Service on a periodic basis.

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These taxes, also known as "trust fund taxes," include income taxes and the taxes that fund Social Security and Medicare.

But, according to charges, Sieren never forwarded the funds to the IRS. An IRS spokesperson declined to comment on what happened to any money that had been withheld from employees’ paychecks.

"Employees usually are not liable for the under or nonpayment of their employment tax, as long as they are correctly and timely filing their individual tax returns each year," IRS Special Agent Leslie Anderson said. "If guilty, the defendant/employer usually has to pay restitution to the IRS, which covers those lost amounts."

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Anderson said that not paying employment taxes "could also negatively affect employees’ retirement payments via the Social Security Administration if those wages are not reported to SSA either," but declined to say whether that happened in this case.

"Business owners are required to withhold income taxes for their employees and remit those taxes to the IRS," Special Agent in Charge Tyler Hatcher of the IRS criminal investigation division St. Louis field office said in a news release. "IRS Criminal Investigation takes these crimes very seriously not only because of the impact on federal revenue, but more importantly because of the way employee benefits are impacted."

Sieren is charged with 20 counts of Failure to Collect, Account for and Pay Over Trust Fund Taxes, two counts of Bank Fraud and two counts of False Statements to a Financial Institution. If convicted, he faces a maximum sentence of 30 years in prison.

Wapello man sentenced for failing to file income taxes

Sieren's initial appearance came just days after another Iowa man was sentenced to six months in prison for failing to file income tax returns.

Bradley Earl Ewart, 51, of Wapello, was sentenced Aug. 1 to six months in prison. Ewart had pleaded guilty on March 24 to two counts of failure to file income tax returns, one for each of the calendar years 2016 and 2018.

The court imposed a three-month prison sentence on each count, to be served consecutively. Following his prison term, Ewart will be on supervised release for one year. He also faces a $20,000 fine.

"Mr. Ewart is a prime example of a taxpayer who has learned from his mistakes and is moving forward in compliance with his tax obligations," Ewart's attorney Patrick Mullin said.

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Since about 2004, Ewart has owned and operated Louisa County Millwright, LLC, a company that specializes in grain elevator work, material handling, steel building installation and fabrication.

Ewart failed to file federal income tax returns for the years 2004 to 2014, according to the U.S. Attorney’s Office for the Southern District of Iowa . As part of his plea, Ewart admitted that he knowingly and willfully failed to file tax returns for the years 2015, 2016, 2017 and 2018. He will be responsible for paying his tax liability in full.

"Mr. Ewart admitted that he repeatedly failed to file his federal income tax returns the majority of the time his business was in operation," said IRS-Criminal Investigation Special Agent in Charge Tyler Hatcher in a news release . "Earning prison time and a $20,000 fine for this offense sends a clear message that we all have the responsibility to file accurate returns on time and pay our fair share of taxes."

Grace Altenhofen is a news reporter for the Des Moines Register. She can be reached at galtenhofen@registermedia.com or on Twitter @gracealtenhofen.

This article originally appeared on Des Moines Register: Iowa businessman charged with fraud, failure to pay over $440,000 in employment taxes

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