The United States has Filed a Lawsuit Against Des Moines, Advanced Underground Construction LLC and its principal, William David Ward II, Alleged “Pyramiding” of Employment Taxes

Source- http://www.justice.gov/tax/txdv111050.htm

WASHINGTON - - The United States has filed a lawsuit in an Iowa federal court against a Des Moines, Iowa, metro area company, Advanced Underground Construction LLC and its principal, William David Ward II, the Justice Department announced today. The civil injunction suit asks the court to stop the defendants’ alleged repeated failures to pay to the U.S. employment taxes that are withheld from employees’ wages.

The government complaint alleges that between the third quarter of 2004 and the present date, the defendants repeatedly failed to make required employment tax deposits to the United States for nine quarters, instead using taxes withheld from employees’ wages as working capital, a practice sometimes referred to as “pyramiding.” The government’s complaint further alleges that the defendants’ misconduct has resulted in a balance due to the government of more than $370,000.

According to the complaint, the defendants have made minimal payments of their tax debts, and government attempts to induce voluntary compliance have failed. The complaint seeks an injunction requiring the defendants to timely deposit and pay withheld employment taxes, and to timely file all employment tax returns.

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