Monmouth County office cleaning company owner sentenced to prison for employment tax charges and tax evasion

 

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Date: February 18, 2021

Contact: newsroom@ci.irs.gov

TRENTON, NJ — The owner and operator of a commercial office cleaning business located in Tinton Falls, New Jersey, was sentenced today via video conference to one year and one day in prison for employment tax charges and tax evasion.

U. S. District Judge Peter G. Sheridan also ordered John Storz, a resident of Eatontown, $395,723.46.

"With this year's filing season just beginning, today's sentencing should send a strong deterrent message to those individuals who would attempt to evade their federal tax obligations," stated Michael Montanez, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office. "If you cheat on your taxes, there are consequences, including being a convicted felon with a prison sentence to serve for your crime."

According to court documents and statements made in court:

Storz owned and operated John Storz Enterprises Inc., d/b/a Class A Cleaners (JSEI), located in Tinton Falls, NJ. As the owner and operator of JSEI, Storz was responsible for collecting, accounting for and paying over payroll taxes for his employees. Storz was also responsible for filing with the IRS Form 941, Employer's Quarterly Federal Tax Returns, reflecting the employment taxes that the business had withheld and paid to the Internal Revenue Service each quarter.

During the years 2013 through 2015, Storz cashed over $1.2 million dollars of client checks at a check casher. Storz utilized the majority of the cash to pay his employees off the books. Storz was required to withhold, report and pay over employment taxes to the IRS on the amount of wages he paid to JSEI employees. Storz admitted that for the third quarter of 2015, he failed to report any of the cash wages paid to his employees. In doing so, Storz failed to pay over $6,471.29 in payroll taxes on behalf of his employees.

In total, for tax years 2011 through 2015, Storz failed to pay over approximately $213,513.46 in

employment taxes.

During the years 2013 through 2015, JSEI was considered a Sub-Chapter S corporation. As such, the ordinary business income of JSEI was reported on the personal tax returns of Storz. Storz failed to report as income any of the checks that he cashed at the check casher on the corporate returns of JSEI. In addition, Storz used the business bank account to pay for personal expenses such as his home mortgage, life insurance, car lease payments, personal credit card purchases and home utilities. Storz deducted these personal expenses as business expenses on the corporate returns of JSEI therefore reducing the amount of ordinary business income of JSEI that Storz reported on his personal tax return.

Storz admitted that for the 2015 calendar year, he failed to include approximately $179,500 of additional taxable income on his personal tax return, which resulted in an additional tax due and owing of approximately $49,499.

In total, for the tax years 2011 through 2015, Storz failed to report approximately $717,628 of additional income, which resulted in a total tax loss of approximately $182,210.

The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Michael Montanez and the U.S. Attorney's Office, under the direction of Acting U.S. Attorney Rachael A. Honig.

The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski.