Pillow salesman Mike Lindell, a supporter of former President Donald Trump, is facing an "employee tax withholding audit" for allegedly failing to pay employee tax, he has revealed.
Lindell told Steve Bannon's War Room video podcast he believes political opponents have launched "an all-out attack" on his company, MyPillow.
He said they are trying to shut down his call centers, which he described as simply "home moms" working remotely. He suggested that they are independent contractors and not employees.
The MyPillow CEO has been paying the price for peddling election conspiracy theories, including cancellations by major retailers, a series of defamation suits and, according to him, having his company credit line cut.
Last week, Lindell told Bannon that the IRS had now launched five audits examining employee payments over three years, which he believes is linked to his support for Trump.
His latest podcast interview with Bannon, released on Monday, offered an insight into the IRS audit, with Lindell insisting that he would not give in to his opponents.
Newsweek could not verify Lindell's claims and has contacted his lawyers as well as the IRS.
David M. Schizer, professor of law and economics at Columbia Law School in New York, told Newsweek that he has not followed Lindell's case and so cannot comment on it directly.
In general terms, he said that the IRS is barred from doing audits for political reasons. "There have been scandals over the years when the IRS has been accused of auditing taxpayers for political reasons. Richard Nixon was widely criticized for proposing this possibility to his advisors, and the IRS was roundly criticized during the Obama Administration for the way it audited nonprofits, using filters that singled out conservative organizations," he said.
"But when a taxpayer claims that an audit is tax-motivated, the IRS may well be able to show that this isn't the case. There may be aspects of a taxpayer's return that draw their attention. The IRS is very guarded about revealing what these "audit triggers" are, if only so that taxpayers won't take advantage of this knowledge."
Schizer said that if members of Congress are persuaded that an audit is tax-motivated, they can hold hearings. "Sometimes the IRS Inspector General gets involved to investigate whether this is the case. But these interventions are rare," he said.
Asked about penalties for tax fraud, he said there are both civil and criminal sanctions. "They can be imposed on the corporation or, in some cases, on the corporation's employees who are involved in the fraud. There also are penalties for understating income (even if the understatement is not fraud) and these penalties can add up. This is especially true now that interest rates have increased, so interest charges, which are added to penalties, can be significant as well."
David Rosenbloom, a tax professor at NYU law school, agreed that claiming that an IRS audit is politically motivated is unlikely to help a company under investigation.
"It is pretty much unheard of (nothing, however, is impossible) to bring cessation to a criminal tax investigation based on unfair targeting. And in any case, alleging targeting is a ways from proving it," he told Newsweek.
"As for criminal tax fraud...there are a variety of separate crimes that fall under that umbrella -- failing to report true and accurate income, making false statements or claims, etc. Some of these crimes carry substantial jail sentences, at least potentially."
This has been a tough year for Lindell and his legal difficulties continue to pile up. As part of a defamation lawsuit brought against the MyPillow CEO by Eric Coomer, a former executive at Denver-based Dominion Voting Systems, recent court documents showed that his attorneys filed a motion seeking compensation for Lindell's depositions. Lindell has falsely claimed that the 2020 election was rigged using Dominion machines.
The lawyers said Lindell was "vulgar, threatening, loud [and] disrespectful" during three depositions. The motion also noted that he called one of Coomer's attorneys an "ambulance-chasing a******."
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Sean O'Driscoll is a Newsweek Senior Crime and Courts Reporter based in Ireland. His focus is reporting on U.S. law. ... Read more
