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United States v. Mealey, Cr. 07-80-02-SM


“Client charged with a conspiracy to defraud the IRS by evading collection and payment of employment taxes. Client was involved with three temporary employment agencies during the years 2000-2004. The agencies treated workers as independent contractors, paid workers in cash and did not withhold employment taxes from their wages. The United States Government brought charges alleging the workers were employees of the agencies and the cash payments were part of a conspiracy to avoid the agencies’ obligation to withhold and pay employment taxes. The defense at trial was: 1) the government could not prove beyond a reasonable doubt that the workers were employees and not independent contractors; and 2) the government could not prove beyond a reasonable doubt that client did not have a good faith belief that workers were independent contractors. On Day 2 of the trial, after cross-examination of government witnesses in which the defense established the client’s good faith belief that the workers were independent contractors, the United States dismissed the indictment and all charges against the client were dismissed.”

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