A Maryland restaurant owner has pleaded guilty to employment tax crimes.
John Worthington, who owned and operated The Grill at Harryman House restaurant in Owings Mills, Maryland since 1995, admitted his willful failure to account for and pay over employment taxes, and to filing a false personal tax return. His actions resulted in an estimated $2.8 million unpaid tax debt to the IRS.
According to court documents, instead of paying his taxes, Worthington used the restaurant’s revenue to finance his lifestyle, including golf club membership dues, season tickets to the Baltimore Orioles, international vacations, and salaries for himself and his wife.
Small business owners should note that neglecting to fulfill tax responsibilities can lead to serious financial and legal consequences. According to U.S. tax law, employers are required to withhold federal income and Social Security and Medicare (FICA) taxes from their employees’ wages and report these withholdings to the IRS. Failing to do so, as Worthington did from 2010 through 2021, resulted in charges of willful failure to account for and pay over employment taxes.
In addition to these business-related charges, Worthington also filed a false 2016 personal tax return that inaccurately claimed $24,207 in federal income tax withholdings from his own restaurant wages. This led to a $9,096 refund he was not entitled to and a subsequent charge of filing a false tax return. Moreover, Worthington failed to file his personal income taxes for the years 2017 through 2021 and did not file corporate tax returns for the period 2016 through 2021, despite the corporation generating gross receipts or sales exceeding $15 million during that time.
Facing the consequences of these charges, Worthington is now staring down the possibility of 8 years in prison. He is also subject to supervised release, monetary penalties, and restitution. Judge Julie R. Rubin will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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