Company owner sentenced for failing to turn over employee taxes


Date: September 1, 2022


U.S. District Judge Rodney W. Sippel on Thursday sentenced the owner of a company who withheld taxes from employee paychecks but didn't turn them over to the IRS to five years of probation and ordered him to pay more than $700,000 in restitution.

Blue 2.0 LLC owner Jonathan Michaelson, of University City, will have to pay $1,000 per month, or 10% of his monthly income, until the money is paid off.

Michaelson withheld a total of $767,367 in income, Social Security and Medicare taxes from employee paychecks from tax years 2014-2017, but didn't turn that money over to the IRS.

Michaelson was indicted in September 2021. He pleaded guilty in May to one count of willful failure to pay over tax.

Charles Miller, acting Special Agent in Charge of the IRS Criminal Investigation's St. Louis Field Office, said, "IRS-CI takes employment tax crimes very seriously because of the impact these offenses have on employee benefits. Mr. Michaelson withheld taxes from his employees' income and instead of paying the taxes to the IRS as he was required to do, he used the money to enrich his personal lifestyle. Today's sentence serves as a warning for any employers considering defrauding their employees and honest taxpayers in this way."

The case was investigated by the Internal Revenue Service. Assistant U.S. Attorney Gwendolyn Carroll prosecuted the case.