TAX NEWS - March 2009

Delaware tax: Newark Business Owner Indicted For Failing to Pay Over Payroll Taxes

(Wilmington, DE) – Patrick T. Carter, Director of Revenue announced today that the Grand Jury for the Superior Court in New Castle County returned a six-count indictment charging a local woman with her willful failure to collect and pay over more than $40,000 of payroll taxes to the State of Delaware as well as her failure to file state income tax returns.

Judy P. Layaou, 52, was charged with three felony counts of failing to pay over state withholding taxes that were withheld from her employees' wages during the years 2006 through 2008. Layaou was also charged with three misdemeanor counts of failing to file a state personal income tax return for taxable years 2005 through 2007.

Investigators say that Layaou operated two Newark-based businesses under the names Layaou Landscaping and Newark Mower Center and that she was responsible for maintaining the payroll and financial records for both businesses. As part of her duties, Layaou was responsible for remitting withholding taxes owed by the businesses to the Division of Revenue. During tax years 2006 through 2008, Layaou issued W-2 forms to her employees reflecting that state payroll taxes were withheld from their wages, but she failed to pay over those taxes to the State of Delaware.

The indictment also alleges that for the years 2005 through 2007, Layaou earned sufficient income requiring her to file a State of Delaware personal income tax return, yet she failed to do so.

The three felony counts each carry a maximum penalty of five years in prison, and such fines and penalties as the court deems appropriate. The three misdemeanor counts each carry a maximum penalty of one year in prison and $2,300 in fines.

This case stems from an investigation conducted by the Delaware Division of Revenue's Criminal Investigation Unit and referred to the Delaware Attorney General's office for indictment and prosecution.

Layaou awaits arraignment and trial date in Superior Court in Wilmington.