Legal Question in Tax Law in Indiana

Employee liability for employer's tax evasion

I, the administrator, enter all expense transactions into our company accounting ledgers. My boss, the owner, regulary submits personal expenses to be paid for by the company and therefore entered as an expense for the company. These expenses range from non-business restaurant meals to supplies at the hardware store to a laptop computer for his daughter. This adds up to 10's of thousands of dollars per year. Because I enter these personal expenses into the business account with full knowledge of the impropriety, am I in danger of any recourse from the IRS? What legal obligation do I have in this situation?

Asked on 10/31/05, 4:54 pm

1 Answer from Attorneys

Kreig Mitchell Law Office of Kreig Mitchell LLC

Re: Employee liability for employer's tax evasion

It sounds like you are in a bad situation. You should engage a tax attorney immediately. It sounds like you have been helping your employer commit fraud, which can be a state and federal crime. If someone is going to jail, you should make sure that it is not you. Even if the crime is never discovered, you can still be subject to civil penalties. If anyone is going to have to pay, you should make sure it is not you. Even if the civil penalties are never imposed, you still have to live with the fact that you are participating in something you are not comfortable with. My personal opinion: life is too short to work under those conditions, if possible, try to find new employment. Bottom line: talk to an attorney.

Good luck.

Disclaimer: nothing in this post creates an attorney-client relationship, nor is it intended to be tax or legal advice. You must speak to your advisors to consider your personal situation.

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Answered on 10/31/05, 5:36 pm

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