On Jan. 6, 2017, Janis Edwards, the owner of a professional employer organization, pleaded guilty to tax evasion arising from failing to pay over to the IRS between $3.5 million and $25 million in withholdings that her organization had collected from the paychecks of her clients’ employees. Professional employer organizations, often called “PEOs,” have presented the IRS and the DOJ with substantial employment-tax enforcement issues over the years. This is because PEOs and their owners are not employers and therefore do not technically have a duty to collect and pay over employment taxes. (I will reserve for another blog post any discussion of the impact of the Tax Increase Prevention Act of 2014 and the resulting Internal Revenue Code sections 3511 and 7705.) Normally, the DOJ would charge an employer who had committed the acts that Ms. Edwards admitted to committing with willful failure to collect or pay over employment taxes instead of tax evasion. Because of the wrinkle that the PEO presented, though, the DOJ had to find a different charge, in this case tax evasion. The maximum penalty for tax evasion is five years in prison. The court has not yet set a sentencing date.