MADISON, WIS. — The owner of Johnson Sausage Shoppe Inc. (JSS), Christa Johnson, 57, pleaded guilty for refraining from paying withholding taxes. She was sentenced to one year in prison in addition to a fine of $25,000 and over $300,000 as a restitution payment to the IRS.

Johnson has owned and operated JSS — a meat processing plant, grocery store and catering service in Rio, Wis. — since 1996. Johnson was responsible for JSS’s business operations, including accounting, finance, payroll, and the hiring and firing of employees.

After an investigation conducted by IRS Criminal Investigation, a 17-count indictment was filed against Johnson: seven counts of withholding income taxes and payroll taxes from her employees and not paying the taxes over to the IRS, nine counts of not paying the employer's share of employment taxes, and one count of obstruction of IRS collection efforts.

According to the indictment, from the first quarter 2013 through the fourth quarter 2016, Johnson failed to file JSS’s quarterly employment tax returns and pay employment taxes in a timely manner. During that time frame, JSS paid $1,496,524.69 in wages but withheld FICA taxes and the employee’s income taxes, which totaled $211,337.32. Johnson did not give any of the taxes to the IRS. Johnson also failed to pay to the IRS the employer’s matching share of FICA taxes, which totaled $111,137.80, and federal unemployment taxes, which totaled $4,430.54, for the same time period. In total, JSS owed $326,905 in unpaid taxes to the IRS.

During a hearing held Dec. 1, Johnson pleaded guilty to one count of not paying over the employee tax withholdings for the third quarter of 2016. She agreed that the total tax loss of the scheme amounted to $326,905.

US District Judge James D. Peterson said Johnson’s conduct was serious, both for the large tax amount due and for the long period time Johnson engaged in defiance against the IRS. Peterson said the prison sentence reflects the seriousness of the crime and serves as a warning to other employers so that they know they will be held accountable if they withhold taxes from their employee wages.