Is Failure To Pay A Tax Embezzlement

[Ayatollahgondola]

Circumstances are unclear on this still, but does failing to pay taxes constitute embezzlement now? If so, this could bring millions of taxpayers under the umbrella of criminal proceedings in the future for having not paid a tax. Up until now, owing money has not been a crime, save for child support arrears which was the first instance that I'm aware of making a debtor a criminal.
Depending on how the tax code is structured in that city, a person required to collect a tax is usually liable for the money even if they didn't collect it, and that would make it his funds under his control until transferred to the city treasury in some manner. If he had access to the city account and stole it from there, that would constitute embezzlement for sure, but this does not appear to be the case here.

Hotel owner charged for allegedly keeping taxes


REDWOOD CITY, Calif. -- The owner of a South San Francisco hotel is facing charges after authorities say he collected hundreds of thousand dollars in taxes from guests, but failed to turn the money over to the city.

http://www.sacbee.com/state_wire/story/2378407.html

[Kathy63]

Well, he collected the taxes on behalf of the state. What would you call it? If he were an employee who collected monies on behalf of the employer and kept the money instead, would that be embezzlement?

This has nothing to do with paying taxes. It's turning over taxes already PAID and collected to the entity (the state) having actual ownership of that property.

[Ayatollahgondola]

He's not even remotely an employee of the state or municipal authority, so I don't see how that applies.

Well, he collected the taxes on behalf of the state

I don't know if that's true yet.
In many cases, the taxes are placed upon the company as opposed to the customer. This makes the company responsible even if the money is not collected. If this is the case, he collected the funds to pay the taxes levied upon his company. I don't see how this is embezzlement.

[Kathy63]

Maybe I can explain it to you.

I collect sales tax. I have a permit from the state that allows me to take temporary possession of state funds. By applying for that permit I agree to act as an agent of the state for the collection of such sales taxes. The funds at no time ever become "MINE". At all times the money collected as sales tax belongs to the state. I am not an employee of the state. I am an agent of the state for the collection of sales tax. This hotel owner took possession of state funds, that he collected on behalf of the state and kept it.

Sales taxes are never placed on the company rather than the customer. I think you may have this a bit confused with tip money and income tax. Because the amount of tips is so variable, waitpersons are charged a tip tax according to their receipts whether or not the tip is actually received.

[Ayatollahgondola]

Maybe I can explain it to you.Sales taxes are never placed on the company rather than the customer. I think you may have this a bit confused with tip money and income tax. .

No that's not entirely true. the tax is levied upon the retailer by the state; not the customer

LEGISLATIVE COUNSEL'S DIGEST AB 1614,

as amended, Lempert. Sales and use tax: California Internet Tax Freedom Act.

The Sales and Use Tax Law imposes a tax on the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property. That law imposes the sales tax upon "retailers," as defined, and requires every person desiring to engage in or conduct business as a "seller," as defined, to obtain a sales tax permit

Use taxes are levied upon the customer or end user.

[Kathy63]

Which means even if I do not charge a sales tax, I still have to pay it. Like stores that have sales saying they will pay the sales tax. If I COLLECT sales tax, I collect that tax on behalf of the state. It never becomes my money. That makes it embezzlement.

[Ayatollahgondola]

Which means even if I do not charge a sales tax, I still have to pay it. Like stores that have sales saying they will pay the sales tax. If I COLLECT sales tax, I collect that tax on behalf of the state. It never becomes my money. That makes it embezzlement.

No. It's all your money until you pay what you owe as determined by the tax code. Otherwise you would be required to keep the funds separate from your own. Notice that there is no requirement to do so in the tax code? I'm soory, sales tax code. I don't know what the requirements are that this city placed upon this tax
I might add that California has never filed embezzlement charges against a retailer in relation to the sales tax code. And there's plenty of huge to small amounts that were never paid. Many, many, many.

[Kathy63]

Absolutely! Sometimes they get caught. Failure to pay sales tax is treated much more harshly than failure to pay income tax. In this case, failure to pay sales tax was treated as embezzlement. What does that tell you?

[Kathy63]

Now that I think of it. Sales tax has to be paid on items you remove from inventory and use yourself, or even if given away. Naturally it would be on the total of what is considered retail sales rather than just what was sold.

If sales tax was to be held separately, you know that retailers would also be required to turn over any interest such sequestered funds generate. Be glad it's not required. I am.

[Ayatollahgondola]

Absolutely! Sometimes they get caught. Failure to pay sales tax is treated much more harshly than failure to pay income tax. In this case, failure to pay sales tax was treated as embezzlement. What does that tell you?

The case in question was not sales. I think it was hotel occupancy. A little different I think, but I haven't been able to check into it yet.

Maybe you can explain why the state has never filed embezzlement charges against a retailer for not paying sales tax owed

[Kathy63]

Just because they can, doesn't mean they do. I don't see any impediment to filing embezzlement charges against a retailer that charges and keeps sales tax money. The State of California does consider that a "theft"

http://www.myirstaxrelief.com/sales_and_use_tax_representation.php

This means, that the State tax laws consider you, the responsible person, has “stolen” the sales and use tax-collected money, by your failure to render and pay such sales and use taxes to the appropriate taxing authority agency. Therefore, state taxing authority agencies have extensive powers to recover the sales and use tax-collected money from your business or corporation, with the seizure of assets, and/or liquidation of your business. In California, the State Board of Equalization, BOE, or, SBE, has the power to recover a business’ unpaid sales taxes personally and directly from the owners, officers, shareholders and even the company employees, when certain requirements are met

[Ayatollahgondola]

Just because they can, doesn't mean they do. I don't see any impediment to filing embezzlement charges against a retailer that charges and keeps sales tax money. The State of California does consider that a "theft"

http://www.myirstaxrelief.com/sales_and_use_tax_representation.php

This means, that the State tax laws consider you, the responsible person, has “stolen” the sales and use tax-collected money, by your failure to render and pay such sales and use taxes to the appropriate taxing authority agency. Therefore, state taxing authority agencies have extensive powers to recover the sales and use tax-collected money from your business or corporation, with the seizure of assets, and/or liquidation of your business. In California, the State Board of Equalization, BOE, or, SBE, has the power to recover a business’ unpaid sales taxes personally and directly from the owners, officers, shareholders and even the company employees, when certain requirements are met


Kathy you disappoint me with your reference here. That link is to a private company that wants people to use their services. It seems to me that they have a direct interest in scaring people into thinking they might be committing a crime. Notice they put quotes around the word "stolen"?
I'm still going to hold fast that it isn't a crime....yet

[Kathy63]

You are of course entitled to your opinion. Cheers.:)

[Ayatollahgondola]

From the "better to owe you than to cheat you" file:

Sacramento County Inmate Information System
Inmate Name HAMID, ABDELMAJID MOHAMMAD
Aliases HAMID, ABDELMAJID MOHAMMED
HAMID, ABDELMAJID M
HAMIO, ABDELMAJID M

X-Reference Number X-3805384
Booking/Registry Number 09470603
Date of Birth 02/01/70
Sex Male
Height 5'11"
Weight 200 lbs.
Visits used this week 0 visits used this week. Main Jail Visitation Information
Facility Sacramento County Main Jail (Facility Information)
Housing Location 8E205A
Mailing Address HAMID, ABDELMAJID X-3805384 8E205A
Sacramento County Main Jail
651 "I" Street
Sacramento, CA 95814
Booking Date/Time 03/09/10 at 07:05 PM
Arresting Agency ELK GROVE POLICE DEPARTMENT
Type of Arrest Warrant Arrest
Charges/Bail Case# 10F01097(01) - Warrant Arrest
RT 30480 Felony
MAKE FALSE, FRAUDULENT REPORT TO BOE TO EVADE TAX DUE
Bail: $150,000.00

Total Bail $150,000.00
Outstanding Warrants Unknown
Projected Release Date None
Next Court Date 03/11/10 at 01:30 PM
Court Location & Dept. Department 61 (Courthouse Information)

Here's a lesson:
filing a false report is a big deal, and grounds for arrest and trial.
filing a correct report without paying is not. You can owe them without getting a criminal record or jail time.

[Ayatollahgondola]

From the "better to owe you than to cheat you" file:



Here's a lesson:
filing a false report is a big deal, and grounds for arrest and trial.
filing a correct report without paying is not. You can owe them without getting a criminal record or jail time.

So the story behind this was related cigarettes. I thought it was odd for the SBOE to pursue a vendor criminally. Cigarettes, liquor, and fuel taxes are very dear to them for some reason. The SBOE publishes a list of x amount of people who owe more than 200k in sales taxes. there are many people on there who owe over a million. there are several people on there who owe several million. None of those are charged criminally.

[Ayatollahgondola]

Circumstances are unclear on this still, but does failing to pay taxes constitute embezzlement now? If so, this could bring millions of taxpayers under the umbrella of criminal proceedings in the future for having not paid a tax. Up until now, owing money has not been a crime, save for child support arrears which was the first instance that I'm aware of making a debtor a criminal.
Depending on how the tax code is structured in that city, a person required to collect a tax is usually liable for the money even if they didn't collect it, and that would make it his funds under his control until transferred to the city treasury in some manner. If he had access to the city account and stole it from there, that would constitute embezzlement for sure, but this does not appear to be the case here.

Hotel owner charged for allegedly keeping taxes




http://www.sacbee.com/state_wire/story/2378407.html

Mr. Sanjay Bakshi redwood city, south san francisco