Luther A. Hanson, a 72-year-old resident of Charleston, West Virginia, has been sentenced to three years of federal probation for willful failure to pay over taxes. The sentence includes eight months of home detention and a $5,000 fine. Hanson had previously settled his debt of $146,771.37 with the United States Department of the Treasury before the sentencing.
Court documents reveal that from 2015 to September 2020, Hanson failed to withhold or remit approximately $149,905.38 in employment taxes for two employees at his accounting services businesses. He owns and operates The Estate Planning Group Inc. and L.A. Hanson Accounting Services.
Hanson admitted in court that he had an agreement with the two employees to treat them as independent contractors starting before June 30, 2015. This arrangement was intended to avoid paying the employer portion of employment taxes and withholding employee contributions.
Despite paying gross wages by check, neither employee's job duties changed under this arrangement. Hanson acknowledged knowing they were not independent contractors but continued issuing checks without fulfilling tax obligations to the IRS.
The restitution amount owed by Hanson was adjusted after one employee paid part of the taxes due.
Acting United States Attorney Lisa G. Johnston praised the investigation conducted by the Internal Revenue Service-Criminal Investigations (IRS-CI) and the Federal Bureau of Investigation (FBI). Senior United States District Judge John T. Copenhaver Jr. delivered Hanson's sentence while Assistant United States Attorney Erik S. Goes prosecuted the case.
Further details about this case can be accessed on PACER using Case No. 2:24-cr-119 or through the U.S. Attorney’s Office for the Southern District of West Virginia website.