You may be personally liable! Business is good, but sometimes your cash flow gets a little low and the payroll tax deposit sits a little longer than it should. Or maybe you just got busy and missed your payroll tax return filings.
Regardless of the reason, you’re now behind in your payroll tax filings or payments or both. You might feel like you’re getting free use of that money for a little longer, but the IRS doesn’t see it that way at all. The IRS needs that money to make Social Security payments and other things.
The IRS takes late payroll tax payments more seriously than just about any other tax problem.
Read that last sentence again if it has not sunk in.
To the IRS, a late payroll tax payment is considered stealing money from the government, and they have really put some teeth behind enforcement. The most important thing you can do is to get help from a tax representation professional as soon as possible.
Penalties can add up fast. There’s a failure to file penalty, a Trust Fund Recovery Penalty, interest on the taxes that are late, and the taxes themselves. It can be easy to get into a “temporary” hole that grows quickly. Late payroll taxes are a hole that is difficult to climb out of, and it’s taxing on your peace of mind to have this kind of burden weighing you down.
The Internal Revenue Service, state tax agencies, and local entities will send a letter if one of the following happens:
If you don’t respond to these initial letters, the IRS and other tax agencies can apply liens, levies, garnishments, and seizures in an attempt to collect payment. An escalation to these levels seldom ends well for the business owner or “responsible person (see below).”
It’s a great idea to get a tax professional working on your payroll tax problem. They can help you:
Even if you are not an owner of a company filing payroll taxes late, the IRS may have designated you as a “responsible person if you only worked there under certain circumstances. Do NOT ignore this correspondence!
The IRS aggressively goes after anyone they can when it comes to payroll taxes, even non- owners of the business. If you have a relationship with the business that is of a particular status, duty, and authority, the IRS can blame you for not paying payroll taxes. And in this case, you are guilty before proven innocent.
It’s best to contact a tax representation professional who can argue your case and get your “responsible person” status dropped.
Get in touch at no obligation to you so we can understand your specific tax situation and provide advice on the options available to you. As always, your tax issue is handled with the utmost confidentiality and privacy.