MN Biz Owner Admits He Didn’t Pay $1M in Taxes
A former owner of a Shakopee-based company admitted to failing to pay nearly $1 million in federal income and employment taxes that were withheld from workers, Minnesota's U.S. Attorney's Office announced Tuesday.
Stephen Clough, a former owner of pump manufacturer Gamma Vacuum, pleaded guilty on Monday to one count of willful failure to pay taxes. He was charged for the crime last month.
Clough admitted in his plea agreement that between 2003 and 2010, he failed to pay the Internal Revenue Service (IRS) the appropriate income and employment taxes that were withheld from the wages of Gamma Vacuum's employees.
Clough was solely responsible for the company's bookkeeping, which included the withholding and payment of payroll taxes. Instead of making those payments, he admittedly used the funds to pay for company expenses, which resulted in a tax loss of $944,134 to the IRS, the U.S. Attorney's Office said.
Clough faces up to five years in prison and will be sentenced at a future hearing.