Payroll Tax Problems|Business Tax Audits|Unpaid Employment Taxes

Payroll Tax Problems, Business Tax Audits, and Unpaid Employment Taxes

Cascading Penalties

The IRS has a nasty little trick known as Cascading Penalties. This means that if you only missed a single payroll tax $10,000 deposit 12 weeks ago and then make all remaining deposits completely and on time, the IRS usually applies the next week's deposit to the missed deposit and continues to misapply payments going forward. So instead of a $1,000 penalty on the missed week, the IRS assesses $7,000 in penalties over many quarters, due to this misapplication. So do you think they eventually catch their own folly? No, they will continue this until they are called out on it. We have rescue clients that have had hundreds of thousands of dollars due this abuse.

Important Things to Know About IRS and Payroll Tax Liabilities:

The IRS is very aggressive in their collection attempts for past due payroll taxes.
The IRS assigns a higher priority to collecting payroll tax liability than to other taxes debts.
The IRS will Treat You Like a Theft

Payroll taxes are considered a trust tax, which means that it's the employer's responsibility to collect federal withholding taxes and the employee portion of FICA and pass this on to the IRS. Because of this fiduciary responsibly, the IRS considers it theft to operate your business with employee’s money. The money collected from employees to pay their share of federal withheld tax, FICA and Medicare (Social Security) does not belong to the business and must be accounted for and paid to the government. The IRS will go after this money with a vengeance. Failing to file and pay your payroll taxes is a sure way to incur huge IRS penalties and may be considered a federal crime.

Bottom line: Unpaid payroll taxes can cause you to lose your business and your freedom – Get Business Tax Relief now!

Trust Fund Recovery Penalty- Can and will be Assessed Against You Personally

The “Responsible Parties” for payroll have a duty to pay this money over to the IRS. If the “Responsible Person” fails to do this and the IRS asserts the person is BOTH WILLFULL and RESPONSIBLE. If the IRS cannot collect the debt from the business, they will assess the “Trust Fund Portion” against ANY and ALL “Responsible Persons”. The IRS has some interesting ideas about who is a responsible person. One access the IRS will attempt to collect the TOTAL debt from any and ALL “Responsible Persons”. Over the years we have rescued many taxpayers were the total debt was paid many times over by all “Responsible Persons” combined. Until it is pointed out, they have no plans to return any overpayments. What is worse yet, they will continue to go after the uninformed responsible persons.

The IRS Make It Extremely Difficult to Reach a Tax Resolution

The IRS does not really care if your business survives, so it is very difficult to negotiate a reasonable long-term payment plan.

In Business- Offer in Compromise settlements are almost impossible to get approved. To prevail in these Offers for payroll tax debt, the taxpayer needs representation by an expert who can analyze and effectively articulate the real value of the business, which includes taking into consideration seasonality of the business, as well as macro factors in the economy. For larger liabilities, the taxpayer will be required to submit full financial information both for the business and personally. Since they rarely approve long term workout plans, these are usually a veiled attempt to gather collection information.

Can the IRS prosecute me for Tax Fraud or Tax Evasion regarding payroll tax liabilities?

In addition to closing the business and selling its assets, the IRS can and will pursue criminal actions against those who continually collect and fail to pay over payroll tax liabilities.

Examples of Employment Tax Fraud Investigations- 2014.

This is public information, listed right on the IRS’ site

You’re a Fool If You Think You Can Resolve This One Your Own.

If you owe past due employee taxes and intend to go it alone, without expert representation, against the IRS, you’re a fool! You risk losing your business, having your assets seized, being personally liable and even jail time! It's like going into criminal court case without a lawyer!

We've helped businesses across the nation permanently resolve their payroll tax problems and protect the future of their companies. We know that there's more at stake for our clients than cutting a deal with the IRS to save money - resolving their payroll tax issues is about saving their business.

Resolve your payroll tax problems today! call 800-829-7483 or 800-TAX-SITE

To learn about Payroll Tax Liabilities, see Frequently Asked Questions- Payroll Tax Liabilities