Maryland Attorney Pleads Guilty to Not Paying Employment Taxes

A Maryland attorney pleaded guilty today for not paying employment taxes withheld from the employees of his law firm.

The following is according to court documents and statements made in court: James E. McCollum Jr. was an attorney licensed to practice law in Maryland and the District of Columbia. From 1998 to 2024, McCollum was the sole proprietor of a law firm based in College Park, Maryland, which he operated using a series of business names, including McCollum P.C.; McCollum & Associates LLC; and The McCollum Firm LLC. Nevertheless, McCollum was always the sole owner and operator of the business.

As such, McCollum exercised financial control over the firm, including hiring and supervising employees, operating the payroll, and maintaining signature authority over the business bank accounts. From at least 2000 onward, McCollum was responsible for withholding Social Security, Medicare, and federal income taxes from his employees’ wages and paying those funds over to the government each quarter. McCollum was also obligated to pay over the employer’s share of Social Security and Medicare taxes.

The timely payment of these taxes is critical to the functioning of the U.S. government, because, for example, they are the primary source of funding for Social Security and Medicare. The federal income taxes that are withheld from employees’ wages also account for a significant portion of all federal income taxes collected each year.

Over the last 24 years, McCollum, however, was frequently not compliant with his obligations to pay these taxes to the government or to file the necessary tax returns.

Beginning in 2010, the IRS attempted to collect the unpaid employment taxes, issuing numerous notices and levies to the law firm. When the IRS was unable to collect the outstanding taxes from the firm, it assessed them against McCollum personally and tried to collect them from him as well.

In 2020, instead of paying the taxes that were due, McCollum sought to thwart the IRS’s ongoing collection efforts by transferring his business and its employees to a new entity, The McCollum Firm. Yet, even after the transfer, McCollum continued to not file the requisite tax returns or pay the employment taxes over. McCollum acknowledged that from 2000 through 2024, he did not pay over at least approximately $2,174,992.83 in employment taxes.

McCollum also acknowledged that he did not file his own individual income tax returns and did not pay $220,515 in individual income taxes due for the tax years 2020 through 2022.

The court scheduled sentencing for Sept. 29. McCollum faces a maximum penalty of five years in prison for the failure to pay over employment taxes. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. McCollum also faces a period of supervised release, restitution, and monetary penalties.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation is investigating the case.

Assistant Chief Jorge Almonte and Trial Attorney Mark McDonald of the Justice Department’s Tax Division are prosecuting the case.