The feds are suing an officer of a defunct Mount Vernon contracting firm for $1.8 million to enforce old company tax obligations that could have been settled for far less.
The U.S. Attorney’s Office sued Kenneth LaSala Sr., who was treasurer of Town Masonry Corp., Oct. 4 in White Plains federal court.
Town Masonry was originally assessed nearly $1.7 million for unpaid quarterly taxes dating back to 2013. In 2017, the IRS accepted an offer by LaSala to settle the tax liabilities for $114,583 – less than 7 cents on the dollar – to be paid in monthly installments for two years.
LaSala made some payments, the government claims, but failed to comply with all terms of the compromise offer. In April, the IRS declared that he was in default. As of Sept. 27, he owed $1,827,201.
The prosecutor filed the complaint on behalf of the IRS, to extend the statute of limitations for collecting the debt.
The process of reducing a tax claim to judgment is typically used when a tax levy is about to expire, all administrative remedies have failed, and there is reason to believe that the debt can eventually be collected.
Town Masonry allegedly failed to report and remit employee payroll withholding charges from 2011 to 2013, for income, Medicare, Social Security and unemployment taxes.
LaSala owned only 10 percent of Town Masonry but he was the person responsible for collecting, accounting for, and paying taxes.
He admitted that he “took care of all of the financial things” for Town Masonry, according to the government’s complaint, including personally reviewing nearly every check written.
The government alleges that LaSala said “it didn’t matter” who owned the company. He “ran it.”
“Defendant has also admitted that … he knew that Town Masonry ‘didn’t have the money to pay the payroll taxes’,” according to the government.
Town Masonry filed for Chapter 11 bankruptcy protection in 2012, declaring $7.3 million in assets and $9.8 million in liabilities.
The case was converted to Chapter 7 liquidation in 2013. More than $40 million in claims have been filed. The case is pending.