Employment Tax Evasion
These schemes can vary. The IRS considers the following: Pyramiding: Employers withhold from employers, but then use it for something other than paying the IRS. Employee Leasing: Contracting with another business to handle all employment issues. Then the outside business fails to pay the employment taxes and dissolves. Paying Salaries in Cash: Paying in cash that was never reported. Not taking out employment taxes when the cash is paid. Filing false payroll tax reports or not filing them at all is a common practice to evade employment taxes.