( Patuxent Publishing file )
The firm came under criminal investigation by the IRS after being accused of defrauding clients, including many small businesses in Harford County, by failing for years to remit their federal and state withholding and unemployment tax payments to tax collectors. AccuPay had an estimated 500 to 600 clients.
After several clients filed lawsuits against the firm, AccuPay closed abruptly at the end of February and filed for Chapter 7 bankruptcy liquidation in March. The Bel Air Police Department, which initiated the investigation, had warned that potential victims could number in the hundreds. Many of AccuPay's clients not only had to pay taxes twice but were also hit with late fees and other penalties.
The firm's president, Beverly Carden, never commented publicly, including during a bankruptcy creditors' meeting in April when she invoked her Fifth Amendment rights and refused to answer questions about the company.
The case prompted Sen. Barbara A. Mikulski to introduce legislation to protect small businesses from payroll service provider tax theft and fraud. The Senate Appropriations Committee passed key provisions of Mikulski's proposed tax fraud prevention act, which would require the IRS to send dual notification to a business when its address has been changed by a third party payer. It also would require the IRS to give greater consideration to making arrangements with victimized taxpayers.
As of November, the Maryland Democrat was continuing to urge IRS Acting Commissioner Daniel Werfel to provide updates on the IRS AccuPay investigations.