A Nichols Hills man has pleaded guilty to withholding more than $290,000 in payroll taxes due the IRS.
Theodore Michael Zachritz, of Nichols Hills, has pleaded guilty to willfully failing to pay over to the Internal Revenue Service federal taxes that he withheld from his employees’ wages, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
For many years, Zachritz and his wife owned and operated Lifestyle Pools, LLC in Oklahoma City. As owner of the company, Zachritz deducted and withheld federal income taxes, Social Security taxes, and Medicare taxes (commonly called “payroll taxes”) from wages of Lifestyle Pools employees.
Under federal law, an employer must deduct and withhold payroll taxes from employees’ wages, and then pay over those withheld taxes to the IRS at the end of each quarter.
On Jan. 22, 2013, the United States charged Zachritz with willfully failing to collect and pay over to the IRS the federal income taxes, Social Security taxes, and Medicare taxes withheld from wages of Lifestyle Pools employees for the third quarter of 2006 through the end of 2009. At the plea hearing, Zachritz admitted that he deducted and withheld more than $290,000 in payroll taxes from his employees’ wages during that period.
He also admitted he knew he was required by law to turn over to the IRS the withheld federal payroll taxes each quarter, but he did not do so. Zachritz admitted he still has not paid over to the IRS any of the payroll taxes that he withheld from 2006 to 2009.
At sentencing, Zachritz faces a potential penalty of up to five years in prison, a fine up to $250,000, and restitution to the IRS. In a plea agreement, Zachritz agreed to pay restitution to the IRS in the amount of his criminal conduct. The court will determine the specific amount of restitution due to the IRS at sentencing, which will take place in approximately ninety days.
This case is the result of an investigation conducted by the IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.