May 24, 2023 - A California man was sentenced yesterday to 12 months in prison for willfully failing to account for and pay over employment taxes.

According to court documents and statements made in court, Larry Kudsk of Berkeley, California, operated two construction businesses, Kudsk Construction, Inc., and M. Gutierrez, Inc. These companies served as general contractors or subcontractors, including on some government projects. For both companies, Kudsk was responsible for filing quarterly employment tax returns and collecting and paying over to the IRS payroll taxes withheld from employees’ wages. Kudsk, however, did not timely file employment tax returns or pay over withholdings to the IRS for 2014 and the last three quarters of 2015 for M. Gutierrez, Inc., and for all four quarters of 2016 for Kudsk Construction, Inc. In total, Kudsk caused a tax loss to the IRS exceeding $250,000.

In addition to the term of imprisonment, U.S. District Judge Jeffrey S. White ordered Kudsk to serve three years of supervised release and to pay approximately $244,973 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Ismail J. Ramsey for the Northern District of California made the announcement.

IRS-Criminal Investigation investigated the case.

Trial Attorneys Julia M. Rugg and Charles A. O’Reilly of the Tax Division and Assistant U.S. Attorney Katherine Lloyd-Lovett of the Northern District of California prosecuted the case.
Source: DOJ Release