A Warrenton woman who failed to withhold and pay employment taxes will spend 366 days in prison, a federal judge ruled Jan. 27.
Cynthia Huston, who was a co-owner of Huston Pools, Inc., an “upscale pool design and development company,” between 2004 and 2007, must also repay $253,490 to the IRS.
Documents filed in U.S. District Court for the Eastern District of Virginia show Huston entered a plea agreement with federal prosecutors in November.
In it, she agreed to waive indictment and plead guilty to a “one count information” charging her with willful failure to collect or pay employment tax in violation of federal law.
She faced up to five years in prison, a $250,000 fine, payment of full restitution, a special assessment and three years of supervised release upon completion of her prison sentence.
Had the case gone to trial, Assistant United States Attorney Jasmine Yoon said the government would have proven that Huston:
- Had “significant control over Huston Pool’s finances and was solely responsible for preparing, filing, and paying the payroll tax liabilities on a timely basis for Huston Pools”;
- Failed to “timely file” Huston Pool’s quarterly em - ploy ment tax returns with the IRS;
- Failed to “collect, account for and pay over to the IRS the taxes withheld from the employees’ paychecks”;
- Also failed to pay FICA and federal income taxes “due and owing” to the federal government from the total taxable wages of Huston Pool’s employees” between 2004 and 2007.
A phone call to Huston Pool’s Fairfax office was not returned Tuesday morning.
Patrick Brown, a public information officer for the IRS Criminal Investigation unit in Richmond said he doesn’t know exactly why Huston failed to pay the necessary taxes.
“These types of cases crop up every year, especially in the difficult economic times, where businesses are struggling and trying to cut costs,” Brown said. “The employees actually end up suffering in the end.”