Early on in the days of the Internet, I would actually call up spammers and try to help them understand why they should stop. 80% of the people were confused small businesspeople who were glad somebody gave them the straight scoop. 20% were weasels who would say or do anything as long as it got them what they wanted.
After a few decades of bullshit excuses from irredeemable idiots, I would also end up in the "fuck you, pay me" category. Because nothing short of being as inevitable as death would be enough to get inveterate weasels to actually pay, and nobody wants to be jerked around by weasels.
It sucks for the rest of us, though, because it turns reasonable mistakes like this into land mines.
I can't see how failing to pay hundreds of thousands of dollars in taxes because you can't be arsed to make the basic comparison of "what am I paying" with "what am I supposed to be paying" can be described as a "reasonable mistake".
Do you believe this person was literally unable to reason? Or acting from fraudulent intent? Is this perhaps a mistake that no other person has ever made?
If you're not saying yes to one of those, then I'm not seeing what category applies other than "reasonable mistake". I agree it's a noob mistake, but a lot of businesses are started by noobs.
I merely believe that he was not reasoning when making this mistake. That's all "unreasonable" means.
Given the rest of the story and his replies, I'm also inclined to believe that the mistake was ultimately due to lying to himself about the importance of bookkeeping and how fast funds should have been spent. But even absent that, "unreasonable" is a totally reasonable word for this.
No, the word for "not reasoning" is "unreasoning". "Unreasonable" means something else. In the phrase "reasonable mistake" I mean it in the sense of "ordinary or usual". E.g.: http://legal-dictionary.thefreedictionary.com/reasonable
It is not unusual for new or small businesses to just wing it on accounting for a while and then hire an accountant who has to tidy things up. (If you don't believe me, ask any small business accountant; my pals have story after story like this.) If we take him at his word, him thinking that the payroll service was handling the withholding is also reasonable. And him assuming everything was jake unless somebody was yelling at him is not just reasonable but typical of first-time entrepreneurs. The main unusual thing here is the scope of error and consequences, but startups are all about rapid increase in size, so that's not unusual in context.
Of course, this could also be fraud: he could have known for years that he wasn't paying withholding, hoping to make it up later. It could be that he actively avoided thinking it through or was willfully careless, which would make it negligence. But as he presents it, it's a reasonable mistake. You can see more about exactly what this means if you look in legal sources for "mistake of fact".
That said, I think your skepticism about his story is reasonable. That his partners have both quit after losing confidence in him would make me unsurprised if this turned out to be fraud, not just an honest but titanically stupid mistake.
Early on in the days of the Internet, I would actually call up spammers and try to help them understand why they should stop. 80% of the people were confused small businesspeople who were glad somebody gave them the straight scoop. 20% were weasels who would say or do anything as long as it got them what they wanted.
After a few decades of bullshit excuses from irredeemable idiots, I would also end up in the "fuck you, pay me" category. Because nothing short of being as inevitable as death would be enough to get inveterate weasels to actually pay, and nobody wants to be jerked around by weasels.
It sucks for the rest of us, though, because it turns reasonable mistakes like this into land mines.