A former business owner who withheld federal taxes from his employees’ paychecks but did not forward the money withheld to the Internal Revenue Service (“IRS”) was sentenced today to 21 months in federal prison.
Mark Warm, age 57, from Jesup, Iowa, received the prison term after a September 2, 2021 guilty plea to one count of willful failure to pay over employment taxes to the IRS.
In a plea agreement, Warm admitted that he was the owner of Warm Trucking, Incorporated and was responsible for the company’s finances. Warm admitted that, from 2013 through 2019, he was responsible for withholding income taxes and Federal Insurance Contributions Act (“FICA”) taxes from the pay of Warm Trucking employees and was responsible for forwarding those withholdings to the IRS. However, Warm admitted that for those seven tax years, he failed to forward the money he withheld from his employees’ pay to the IRS, even though he knew he was required to do so. In the plea agreement, Warm admitted he also failed to pay to the IRS other taxes owed by Warm Trucking. In total, Warm failed to send the IRS more than $1,400,000 in taxes owed by Warm Trucking.
Warm was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Warm was sentenced to 21 months’ imprisonment. He was ordered to make $1,406,561.66 in restitution to the IRS. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
“Mr. Warm’s failure to pay employment taxes for seven years was an attempt to dodge his obligations to his employees and to the United States,” said United States Attorney Sean Berry. “Our system and our citizens depend upon employers like Mr. Warm to pay what they owe in employment taxes. This sentence shows that willfully failing to do so is a crime and there will be consequences.”
“Today’s sentencing sends a message that paying both individual and business taxes is an obligation you will be held to. When Mr. Warm made the decision to evade paying his employment taxes, he made a conscious decision to cheat his employees and all law abiding tax-payers,” said IRS-Criminal Investigation Special Agent in Charge, Tyler Hatcher of the St. Louis Field Office. “As the 2022 tax season gets underway, IRS-CI wants it to be clear that, along with the Department of Justice, we will investigate and hold accountable those who cheat our tax system and cause harm to others.”
Warm was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and investigated by the Internal Revenue Service Criminal Investigation.