The attorney for InFocus Partners founder John Vratsinas said Wednesday that the West Des Moines human resources company will pay its business clients' outstanding 2012 tax liabilities next week, but that their previous bills will take longer to settle.
If the company doesn’t make good on the payments, that could be disastrous for some businesses, according to Des Moines CPA Joe Kristan, who commented on the InFocus Partners situation on his tax blog for the public accounting firm Roth & Co.
“If the company doesn’t remit the payroll taxes withheld for employees, the IRS and Iowa will come after the employers, who will end up paying the payroll taxes twice – a painful expense, and to some businesses a potentially fatal one,” he wrote.
Last week, the IRS filed a nearly $1.2 million federal tax lien against InFocus Partners and its subsidiary, ILC Staffing Inc., seeking to collect payroll taxes that should have been paid during the past two quarters for the outsourcing company’s business clients.
According to lien filings reported by the Iowa Secretary of State, InFocus and its affiliated companies have been behind in tax payments off and on since 2006. The latest filing is part of an overall $3.8 million collection effort.
Many of the companies are small and could have difficulty absorbing the cost of a double tax payment.
Vratsinas’s attorney, Christopher James, said in the statement:
“InFocus Partners remains dedicated to resolving all outstanding tax liabilities as soon as possible. All 2012 tax debts will be fully paid by the middle of this month. InFocus Partners will continue making regular payments towards all older tax debt in order to fully satisfy its tax obligations as expeditiously as possible.
“InFocus Partners is otherwise current on all other obligations and is committed to providing quality and timely services to its customers.”
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Asked for clarification about the tax liabilities from previous years, the attorney issued another written answer: "...the older tax debt from previous years will be paid as soon as possible. We have been making payments on the older debt and we will continue to do so."
In his blog, Kristan advised businesses to verify employment tax payments even if they’re using a payroll outsourcing company. Businesses owners can do that enrolling in EFTPS, the Electronic Federal Tax Payment System, and verifying that the employment tax payments have been made.
“If your payroll outsourcing provider doesn’t remit in a way that lets you verify via EFTPS, that means you can’t verify, but only trust,” Kristan wrote. “That can end badly.”
The investigation against Vratsinas and his companies relates to civil issues. The U.S. Attorney’s Office is not involved, said spokesman Kevin VanderSchel.
At least one InFocus Partners client has asked West Des Moines Police to pursue criminal charges against Vratsinas and his company.
Tobias “Toby” Torstenson said he’s out about $850,000 the company paid InFocus Partners’ subsidiary, ILC Staffing Inc., to administer its payroll.
Torstenson paid the money to InFocus, which was supposed to forward it to the IRS but never did, the police report said. Torstenson said he was notified on Oct. 3 by the IRS that the payroll taxes had not been paid since 2009.
Patch previously reported: