SIOUX CITY – An Iowa construction company owner failed to pay his taxes, mislead the IRS and got himself a two-year prison sentence.
The owner of a Sergeant Bluff, Iowa construction firm was sentenced on Friday, April 14, 2023, to two years in federal prison for his role in tax evasion offenses, including for evading payment of his company’s employment taxes, his personal income taxes, and evading payment of a company’s employment taxes which he kept in the name of another.
According to court documents and statements made in court, Kevin Alexander, 62, of Sioux City, owned K&L Construction, Inc., a landscaping and construction company. As the sole shareholder and president of K&L Construction, Alexander was responsible for filing quarterly employment tax returns and collecting and paying over to the IRS payroll taxes withheld from employees’ wages. From the second quarter of 2014 through the first quarter of 2017, K&L Construction paid approximately $3.8 million in wages to its employees and withheld approximately $1 million in payroll taxes, but the company did not pay over any of these withholdings to the IRS.
During IRS collection proceedings, Alexander accepted responsibility for paying K&L Construction’s outstanding tax balance. Alexander, however, submitted a false form to the IRS that concealed some of his assets. Alexander admitted that he submitted the false form for the purpose of concealing assets and evading payment of K&L Construction’s outstanding payroll tax liability. He evaded payment of K&L Construction’s tax debt by operating it through another company, Circle A Construction, Inc. and keeping ownership of Circle A Construction in another’s name. Alexander was found liable, for sentencing purposes, of at least $757,314.74 in tax liability for Circle A Construction. Alexander also willfully evaded paying his personal income taxes for 2014, 2015, and 2016, totaling $667,544 in personal income tax loss.
Alexander was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand to 24 months’ imprisonment. He was ordered to make $1,678,722.39 in restitution. He must also serve a 2-year term of supervised release after the prison term. There is no parole in the federal system.
“Mr. Alexander admitted that he purposely hid his assets to avoid paying his company’s outstanding payroll tax liability,” said Acting Special Agent in Charge Thomas F. Murdock, IRS Criminal Investigation’s St. Louis Field Office. “Employers cheat their employees when they fail to meet that obligation. That’s a serious offense that harms the employee and all the honest taxpayers who’ve paid their fair share of taxes in a timely manner.”
U.S. Attorney Timothy T. Duax of the Northern District of Iowa and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation and the U.S. Department of Transportation Office of Inspector General investigated the case.
Assistant U.S. Attorney Ron Timmons of the U.S. Attorney’s Office for the Northern District of Iowa and Trial Attorney Meredith Havekost of the Justice Department’s Tax Division prosecuted the case.
