Justice Department Seeks to Bar New York Attorney from Using Employment Taxes as Working Capital

WASHINGTON - The United States has filed a lawsuit against New York attorney Thomas B. Pruzan, d/b/a the Pruzan Law Firm, seeking to put an end to Mr. Pruzan’s repeated failure to timely deposit and pay the employment and unemployment taxes due from his law firm, as well as his failure to timely file employment and unemployment tax returns with the Internal Revenue Service.

The government complaint alleges that since the quarter ended September, 30, 1997, Mr. Pruzan has deliberately failed to make current employment tax deposits, and has, instead, used those funds as working capital, a practice referred to as "pyramiding." The complaint further alleges that Mr. Pruzan’s noncompliance with his federal tax obligations has resulted in a balance due to the government of more than one million dollars.

According to the complaint, despite the Internal Revenue Service’s best efforts over the past five years, Mr. Pruzan has made very minimal payments of his tax debt, and all attempts to induce compliance have failed. Accordingly, the complaint seeks an injunction requiring Mr. Pruzan to, among other things, timely deposit and pay his employment and unemployment taxes, and timely file all employment and unemployment tax returns with the IRS.

Since 2001, the Justice Department’s Tax Division has obtained more than 385 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.

United States' Complaint for Preliminary and Permanent Injunction (PDF)