Can Anthony Farrer of The Timepiece Gentleman Go to Jail for Not Paying Taxes?
People are wondering about the ramifications of taxes with everything that’s going on with Anthony Farrer of the Timepiece Gentleman.
I don’t know if he is or he isn’t filing his tax returns and paying his taxes, but he probably isn’t. The question is...
Can Anthony Farrer Go to Jail for Not Paying Taxes?
In this video, I’ll explore the topic along with some possible scenarios. Stay tuned.
If you have no idea, what this topic is about, you can check out my YouTube playlist here, which explains everything:
Here’s what we know:
• Anthony Farrer owes 44 individuals or businesses $5,000,000 dollars, or so
• Anthony Farrer is no longer running his business of selling luxury watches
• If he’s not paying them, we can probably assume he’s not paying his taxes (allegedly).
Let’s talk about what types of taxes are there:
• There are Federal income taxes he would owe to the IRS or Internal Revenue Service.
• There are payroll taxes he would owe for having employees.
• There are sales taxes that he would owe to various states where he met the state sales tax filing threshold.
• There are California state income taxes and franchise fee taxes that he would owe to the state of California.
I think it’s safe to say that if he’s not paying watch consignors for their watches, he’s probably not paying these taxing agencies for the taxes owed to them.
What do you think?
So the next question that comes up is how much could he actually owe.
Federal income taxes:
These are taxes he would owe to the United States Federal government. If he doesn’t return the watches or repay the 5 million dollars, then that’s presumably taxable income, according to the IRS. Allow me to explain.
What does the IRS have to say about taxability of theft? Let’s go to Google…
Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.
It's funny but true; thieves must pay income tax on stolen property they keep or face possible tax evasion charges.
Okay there you have it.
Anthony Farrer potentially owes federal and state income taxes on 5 million dollars at the maximum rate of 37%, here’s the Federal tax table:
5 million times 37% is 1.85 million owed to the IRS.
If that’s not paid when due, then you have penalties and interest, which over the collections period, can just about double that amount to 3.7 million.
I have no idea how much his payroll tax liability might be, but what I do know is…
When running a business, taxes is the last thing desperate business owners worry about. So they often borrow from payroll tax deposits. And this is a big no no, since owner’s can be held personally liable for money owed to the IRS for payroll tax liabilities.
Each state has their own tax filing requirement for sales taxes.
• Basically if you meet the threshold then you’re required to collect and remit sales taxes to that state. It’s complex and not something I care to specialize in.
• With the millions of dollars in sales since 2022, he’s likely met the filing threshold in many states. For a lot of states, the dollar amount threshold is $100,000 dollars. That could be like one Richard Mille watch.
• Anthony made a video about this and he knows about the filing requirements, but knowing and doing can be two totally different things.
California Income Taxes:
• California is one of the toughest states when it comes to income taxes.
• The California Franchise Tax Board is very tough to deal with. They want their money and they don’t play games.
• A California LLC LLCs whose total income is between $1,000,000 and $5,000,000 are charged an LLC fee of $6,800.
• In addition to that, their state income tax rates are as follows:
For income over a million, let’s do the math…
5 million times the maximum tax rate of 13.3% is $665,000.
So, it’s clear that Anthony Farrer of the Timepiece Gentleman, probably has some tax issues going forward.
But, can he go to jail for this?
Speaking strictly from the IRS’s point of view, typically, failure to pay taxes does not result in jail time. It's considered a misdemeanor and usually results in fines.
But, as we saw with the recent Hunter Biden tax case, a misdemeanor failure to pay can be escalated to a felony in some cases.
According to the Department of Justice, those involve individuals who FAIL to file tax returns or PAY a tax “but who also commit acts of tax evasion or obstruction.” In that case, the charges would be brought as felonies.
In other words, I believe someone like Anthony Farrer, who’s stolen $5 million dollars, could go to jail, in the event, that he has not paid their taxes and not filed their tax returns.
With Anthony Farrer, I don’t know if he is or he isn’t. I’m just speculating for the sake of discussion.
Truthfully, this is above my pay grade and my level of comfort, if I’m being honest.
But anyone in this situation would be wise to seek out a tax attorney.
I wish Anthony the best of luck with earning money to repay the money he stole from his consignors.
And let’s be completely clear. It’s not a debt, because he didn’t borrow the money. When you take something that doesn’t belong to you, that’s stealing, it’s theft.
Thanks for reading and see you in the next blog post!