A 46-year-old Whitehouse business owner has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Miles Brosang pleaded guilty to one criminal count of willful failure to collect or pay over tax before U.S. Magistrate Judge K. Nicole Mitchell on Jan. 22, 2020.
According to information presented in court, Brosang was the only director, sole shareholder, and general manager of Brosang’s Landscaping, Inc. As such, he exercised control over every aspect of the business affairs of Brosang’s Landscaping, Inc., including approving all payments by the company and controlling all of the bank accounts of Brosang’s Landscaping, Inc.
During the third quarter of 2015, between approximately July 1, 2015, and September 30, 2015, Brosang’s Landscaping, Inc. withheld payroll taxes from its employees’ paychecks, including federal income taxes, and Medicare and social security taxes (often referred to as Federal Insurance Contribution Act or “FICA” taxes.) Brosang knew that Brosang’s Landscaping, Inc. was required to make deposits of the payroll taxes to the Internal Revenue Service on a periodic basis.
In his capacity with Brosang’s Landscaping, Inc., Brosang was a “responsible person,” that is, he had the corporate responsibility to collect, truthfully account for, and pay over the payroll taxes for Brosang’s Landscaping, Inc. During the third quarter of 2015, Brosang’s Landscaping, Inc. failed to make required payments to the Internal Revenue Service. As a responsible person, Brosang knew that Brosang’s Landscaping, Inc. had a duty to pay, and the ability to make, the required payments, and he intentionally and willfully failed to make and pay over, or have Brosang’s Landscaping, Inc. make and pay over, the payments. The amount of taxes that should have been, and was not, paid over for the third quarter of 2015 is $49,704.47. The total of payroll taxes that should have been, and was not, paid over is $229,552.
“Business owners need to understand the importance of their obligations in the withholding of payroll taxes,” said United States Attorney Joseph D. Brown. “They hold those taxes in trust for the employee and the government and there are criminal penalties for those who divert those funds for other uses.”
Under federal statutes, Brosang faces up to five years in federal prison at sentencing. The maximum penalty prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office. This case was investigated by the IRS – Criminal Investigation and prosecuted by Assistant U.S. Attorney Alan R. Jackson.