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Woman sentenced to federal prison for failure to account for and pay over employment tax

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BOISE, Idaho (KIFI) – A Nampa woman was sentenced to 12 months and one day in federal prison for failure to account for and pay over employment tax.

According to court records, from approximately 1999 to 2019, Nicole Beth Howerzyl, 69, was a corporate officer for Dave’s Motorcycle, Inc. (DMI) in Nampa. DMI was in the business of selling and servicing motorcycles. During that time, Howerzyl handled the bookkeeping for DMI, and exercised control over DMI’s financial affairs, including approving all payments by DMI and controlling all of DMI’s bank accounts.

For the calendar years 2013 to 2019, DMI employed approximately 15 to 25 people per year. During that period, DMI withheld taxes from its employees’ paychecks, including federal income taxes, Medicare, and social security taxes, often referred to as "payroll taxes." Howerzyl directly issued payroll checks twice per month and withheld payroll taxes from employees’ paychecks. Howerzyl also issued annual Forms W-2 to the employees of DMI, which reflected their gross wages, as well as their payroll taxes.

As a corporate officer of DMI, Howerzyl was aware that she had the corporate responsibility to collect, truthfully account for, and pay over DMI’s payroll taxes to the Internal Revenue Service (IRS) and file an Employer’s Quarterly Federal Income Tax Return (Form 941) following the end of each calendar quarter.

DMI, however, made no payments to the IRS for the calendar years 2013 to 2019. DMI further failed to file quarterly employment tax returns (Forms 941) with the IRS. Specifically, for the tax years 2013 to 2019, Howerzyl failed to account for $4,874,572.73 in wages at DMI and pay over $1,161,135.25 to the IRS in payroll taxes.

U.S. District Judge Scott W. Skavdahl, from the District of Wyoming, sitting by designation, also ordered Howerzyl to pay $373,552.21 in outstanding restitution to the Internal Revenue Service, pay a separate $10,000 fine, and to serve one year of supervised release following her prison sentence. Howerzyl pleaded guilty to the charge on December 13, 2021.

“Collecting payroll taxes from workers then failing to pay over those amounts to the federal government is a severe breach of trust and an assault on dutiful taxpayers,” said U.S. Attorney Rafael M. Gonzalez, Jr. “It is stealing not only from the workers, but from the public at large. Those who flaunt federal tax laws, must know that they will be investigated and prosecuted," he said.

“IRS Criminal Investigation is committed to investigating individuals who defraud the government for personal gain by failing to submit payroll taxes to the IRS,” said Andy Tsui, IRS Criminal Investigation Special Agent in Charge. “Ms. Howerzyl’s misconduct is a crime against all honest tax payers and we will continue to identify and bring to justice those who evade their tax responsibilities.”

U.S. Attorney Rafael M. Gonzalez, Jr. commended the efforts of the Internal Revenue Service Criminal Investigation, which led to charges.

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