Sacramento Waste Firm Hit with Tax Payback Order

Feds strike a blow against financial chicanery in Sacramento as Capitol Waste Inc. and its owners are ordered to pay nearly $2.6 million in back taxes. A federal court has issued a preliminary injunction, mandating the waste disposal firm and its proprietors, Iva and Kenneth Whitmire, to adhere to federal employment tax withholding regulations.

The lawsuit, filed by federal prosecutors on October 8, 2008, accused Capitol Waste of neglecting its tax obligations since 2000. The company’s dereliction is said to have resulted in a shortfall of almost $2.6 million in federal employment and unemployment taxes over that period.

According to court documents, Capitol Waste, Inc., a commercial waste disposal business based in Sacramento County, has been dodging its tax responsibilities. Furthermore, the Whitmires face individual income tax non-compliance charges stretching back to 2000.

The court order demands that Capitol Waste files all outstanding employment, unemployment, and income tax returns within 90 days. It also bars any asset transfers by the company that could impede timely tax payments. The Whitmires are also required to file their personal income tax returns promptly.

Nathan J. Hochman, Assistant Attorney General for Tax Division, emphasized the importance of compliance with federal employment tax laws: “All employers must comply with federal employment tax laws. Failure to do so can lead not only to a court injunction but also significant civil penalties and, in some cases, criminal prosecution.”

Assistant Attorney General Hochman commended Tax Division trial attorney Adair F. Boroughs for her dedication in handling the case. For more information on federal employment tax laws enforcement efforts, visit the Justice Department’s website.