A Pennsylvania school transportation business owner has pleaded guilty to tax evasion.
Brian Propst, 51, of Greenfield Township, Pennsylvania, pleaded guilty before the U.S. District Court Judge Robert D. Mariani to a charge of tax evasion, the United States Attorney’s Office for the Middle District of Pennsylvania said in a statement.
Propst operates DKB Transportation Inc., a bus company that provides transportation for various school districts in Northeastern Pennsylvania. From 2016 through 2019, DKB Transportation employed a number of individuals, about one-half of whom Propst paid “under the table,” with no employment tax money withheld or paid to the IRS, according to United States Attorney Gerard M. Karam.
Propst agreed to cooperate fully with the IRS and to pay all taxes owed together with interest and penalties as determined by the court. The combined maximum penalty under federal law for this offense is five years in prison, a term of supervised release following imprisonment and a fine.
The Scranton Office of the IRS Criminal Investigation investigated this case.
Unreported employment is estimated to be a $2 trillion economy, and the IRS claims that the government loses $500 billion in tax revenue annually due to unpaid taxes from both the employer and employee. The federal agency says that working under the table creates havoc for businesses, workers, and the government because these cash payments are difficult to trace or quantify.
Under federal law, it is perfectly legal for an employer to pay his or her employees using cash, but the payments must be reported to the IRS in a timely and accurate fashion. An employer’s failure to report employee wages is going “under the table” or “off the books,” which constitutes a serious violation of the Internal Revenue Code. Employers are required to deposit and withhold a variety of employment taxes, regardless of whether their workers are paid in cash or by other means, such as direct deposit.