On February 14, 2020, in the Eastern District of Pennsylvania, Myles Hannigan was sentenced for obstructing the due administration of the Internal Revenue Service (IRS) and aiding and assisting in the preparation of materially false income tax returns. Hannigan was charged for the offenses in July 2019.

According to the court documents, Hannigan owned and operated Payroll Professionals, Incorporated (PPI), located in Media, Pennsylvania. PPI is a third-party payroll processor that assists its clients by handling certain payroll services, including issuing payroll checks for its taxpayers/clients and forwarding tax payments to the Federal, State, and local authorities.

On over 100 of the Forms 941, Employer's Quarterly Federal Tax Return, that Hannigan prepared and filed for taxpayers/clients for the Tax Years 2011, 2012, 2013, 2014, and 2015, he followed a practice of falsely overstating deposits that he made to pay taxes owed by his taxpayer/clients to the IRS. Specifically, on Form 941, Line 11, Hannigan reported depositing more money to pay tax debt than he actually sent to the IRS, causing victims collectively to underpay the IRS approximately $3,270,566.89 for those tax years. Additionally, Hannigan concealed from his taxpayers/clients that taxes had not been paid by preparing and presenting bogus documents to some PPI clients that falsely reported that taxes were paid to the IRS. Hannigan impeded the efforts of the IRS to contact his taxpayers/clients about tax delinquencies by re-routing IRS notices from his clients' business addresses to PPI's business address.

Hannigan was sentenced to 52 months' imprisonment followed by one year of supervised release. He was further ordered to pay $3,270,566.89 in restitution and a special assessment of $1,800.

Source:  The facts in this case narrative come from the following publicly available documents: E.D. Pa. Information filed July 2, 2019; and E.D. Pa. Judgment filed Feb. 18, 2020.