Why the IRS Deals So Harshly With Businesses That Don't Pay Their Payroll Tax
Why the IRS Deals So Harshly With Businesses That Don’t Pay Their Payroll Tax
Not paying payroll tax is something the IRS considers very serious. As an employer, you are responsible for withholding part of your employees’ wages to pay their: Income tax and FICA (Social Security & Medicare) tax.
Since the employees place their trust in you that you are taking this money out of their paycheck and are paying these taxes with their money, they are called "Trust Fund Taxes".
However, if for any reason you fail to pay this money - in the eyes of the IRS you have betrayed the “trust” of the employees and you have taken money that does not belong to you.
Therefore, the IRS can be particularly aggressive with businesses that don’t pay their payroll tax.
If you owe payroll tax, the IRS may exercise their authority to collect by using the Trust Fund Recovery Penalty (TFRP) against you. If it’s determined by the IRS that you are the responsible party for collecting the taxes, and you willfully failed to file them, you will be notified with the plan to assess the TFRP against you. You will then have 60 days to pay the tax or appeal.
If you don’t pay the tax or appeal, the IRS may do everything in their power to get the money, which may include the following:
- Seize your personal assets
- Place a lien against your property or worse…
It’s tough running a business when you owe payroll taxes – like swimming upstream. You have to pay your suppliers - while still coming up with the tax money somehow.
You must stay current with current payroll tax while you’re paying the old tax – and you can’t be late with the payments. And through all of this you have to figure out how to not go broke personally. But even though all of this is tough – consider the alternative.
If you don’t take action and resolve your problems with the IRS, things can get very ugly.
If you have a payroll tax problem or a personal IRS tax problem, please call attorney Mary E. King today, for a free consultation about your problem at (941) 906-7585.
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posted by Mary E. King on Tue., Sep 27th, 2011 in Florida IRS Tax Attorney Legal Services Payroll Taxes Payroll Trust Fund Tax Tax Problems |
