Waste Firm Dodges $2.6M in Taxes, Faces Federal Heat

SACRAMENTO, CA – Capitol Waste Inc., a commercial waste disposal operation, and its owners, Iva and Kenneth Whitmire, are in deep trouble with the feds after allegedly stiffing the IRS out of nearly $2.6 million in employment and unemployment taxes. A federal court in Sacramento has issued a preliminary injunction, effectively freezing the company’s assets and demanding immediate compliance with federal tax laws.

According to court filings, the Whitmires and their company have been dodging tax obligations since 2000. The feds allege a systematic failure to remit withheld FICA and income taxes from employees, along with unpaid unemployment taxes. This isn’t just a bookkeeping error; it’s a deliberate attempt to avoid paying what they owe, leaving employees potentially on the hook and shortchanging vital government programs.

The injunction doesn’t just demand current and future tax payments. Capitol Waste and the Whitmires have 90 days to file all outstanding tax returns – a mountain of paperwork they’ve apparently been avoiding for years. Crucially, the court order prevents the company from moving or selling any assets that could be used to satisfy the $2.6 million debt and future liabilities. This is a clear signal the feds intend to collect.

“All employers must comply with federal employment tax laws,” stated Nathan J. Hochman, Assistant Attorney General for the Tax Division. (Grimy Times translation: Pay your taxes, or we’ll come for you.) Hochman warned that failure to comply carries not only court injunctions but also hefty civil penalties and the possibility of criminal charges. The feds are emphasizing that this isn’t a victimless crime; it harms both employees and the government.

The case, initially filed in October 2008, highlights the ongoing effort by federal prosecutors to crack down on employment tax fraud. While the initial complaint dates back over a decade, the recent injunction demonstrates the feds aren’t letting this one drop. Tax Division trial attorney Adair F. Boroughs is leading the charge, and sources inside the IRS suggest this is far from over.

Capitol Waste operates within Sacramento County, California, servicing businesses and residents with their waste disposal needs. The irony isn’t lost on anyone: a company built on taking away garbage is now accused of creating a massive financial mess. This case serves as a stark reminder that no one – not even those dealing with literal trash – is above the law. The feds will continue to pursue those who attempt to cheat the system, no matter how long it takes.