Posted on 11/05/2021 10:08:26 AM PDT by Oldeconomybuyer
ATLANTA (AP) — The son of R&B legend Gladys Knight has been sentenced to serve two years in prison for failing to withhold payroll taxes for the restaurants that bore his mother’s name, federal prosecutors in Atlanta said.
Shanga Hankerson opened his first restaurant, Gladys Knight’s Chicken and Waffles, in Atlanta in 1997. Over the next several years, he opened at least three more locations in Georgia and Washington, D.C.
Hankerson, 45, “willfully disregarded his tax obligations for many years,” Acting U.S. Attorney Kurt Erskine said in a news release. During his sentencing Wednesday, Hankerson, who pleaded guilty in July, was also ordered to serve a year of supervised release following his prison sentence and to pay more than $1 million in restitution.
He was the sole owner of the business and was required to withhold payroll taxes from his employees’ gross pay. From at least 2012 to 2016, Hankerson failed to remit more than $1 million in payroll taxes, prosecutors said.
Knight won a legal battle to sever ties to the business in 2017, and her son was ordered to stop using her name, likeness and memorabilia, according to The Atlanta Journal-Constitution.
(Excerpt) Read more at apnews.com ...
Love that woman. Did she marry the wrong guy?
Don’t like to leave a tip for Uncle Sam either.
Rev Al owed 4.5 million at one point and was never sent to the pokey.
The guy sounds like a pip-squeak...
Was his restaurant called Gladys Knight and the Tips?
While I am not excusing the son, this practice is quite common among restaurant owners. Cash flow is a huge problem so putting off payment of payroll taxes until the next quarter is a huge temptation.
I love that woman too.
Yup—and you get away with it for one quarter and you are a little cash short the next quarter after you bought the Maserati and then one more quarter since the mistress apartment rent is kinda high and before you know it....
Oops.
There’s nothing the IRS hates and readily goes after more viciously than failure to withhold/remit payroll taxes. You can launder hundreds of millions via offshore banks or whatever and that could go on for years. But a small biz out of compliance with withholding regs they will go after with guns blazing. [perhaps a different analogy would be better] Because anything they want to know/show can be readily proven. The IRS will write strenuously worded letters on almost any other topic, but withholding issues, they come and chain your doors shut and slap liens on anything they can.
It’s more or less justified, in this case. If you are withhholding taxes you are supposed to pay on someone elses behalf and you don’t remit, you’re stealing twice. It often happens innocently, but it cannot CONTINUE innocently. The IRS has zero sense of humor on this topic, and once you get into 5 figures on withholding, they will not hesistate to crush you.
It really harms the employees. I think he got off light
He was also an FBI snitch, but I digress.
“this practice is quite common among restaurant owners. Cash flow is a huge problem so putting off payment of payroll taxes until the next quarter is a huge temptation.”
I have worked with probably a thousand business owners over the the past 40 years. Very common not just with restaurants though. They get behind on taxes and it snowballs and after a few quarter doing it they cannot ever pay it back.
This and female employee embezzelers which is also very common.
I know of 4 business that just fired the female employee. They were too embarrased to report it to the police from the lack of watching the books. The ingenous ways women covered up their tracks should be taught in business classes.
One woman would write a check out to herself, photocopy it, cash it, then when the bank statement came in she would white out her name and put in the name of a vender. It was alwways for an off amount 389.89 or such and never just 400.00 which would be suspicious.
Then she would shrink it down and place it over the original bank statement check and photocopy it and repunch new holes in the new statment.
The owner caught it because he noticed the staments from the bank were star shaped and hers were round. She got him for 30,000 over 5-6 years or so.
Businesses do not pay taxes, they collect taxes. That’s the evil brilliance of our tax scheme.
If individuals - not businesses - were required to make quarterly payroll tax payments to the IRS, the government would be instantly forced to shrink by 80%.
“The owner caught it because he noticed the staments from the bank were star shaped and hers were round.”
Fixed it:
The owner caught it because he noticed the staments from the bank had star shaped holes and hers were round.
I saw that!
“There’s nothing the IRS hates and readily goes after more viciously than failure to withhold/remit payroll taxes”
That’s because it’s so easy to prove (to the penny), unlike a lot of other supposed tax shenanigans.
My wife was doing “the books” for a guy who was not paying withholding. She discovered it and called our accountant. He said, “Pack your stuff and get out of there now, today.”
She did.
Okay, sure, punish the taxee for not paying their taxes. Taxes are stupid. Any sort of involuntary redistribution of wealth/income is stupid. But the laws are the laws.
But I think it is the responsibility of the taxors to have simple, enforceable rules. He should have to pay about the first month of unpaid taxes, after that, it is the fault of the government for not collecting the taxes. You can’t have it both ways. If you make the rules complicated and difficult to follow and enforce, that is your fault.
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