Sec. 7202 Willful failure to collect or pay over tax

26 U.S.C. section 7202, Willful failure to collect or pay over tax. IRC section 7202 addresses the tax crime felony for failing to collect, account for, or pay over withheld taxes. This charge is very often used against employers who either don’t withhold employment taxes or don’t pass along those taxes to the IRS. Sometimes business owners will accrue employment tax liabilities in one business, close the first, and open a second with the same operations but with a new name – this is often called pyramiding. Like other tax fraud felonies, failure to pay over charges include the element of willfulness defined as the voluntary, intentional violation of a known legal duty.