Most business owners know that they are responsible for ensuring that the payroll taxes for themselves and their employees get paid to the Internal Revenue Service (IRS). Something many people don't realize is that, unlike other corporate taxes, owners can be held personally liable if those taxes go unpaid. Furthermore, employees, officers and even shareholders of companies can be penalized for unpaid payroll taxes under certain circumstances.
Pensive businessman calculates taxes at desk in office
It is important to understand that payroll tax debt is very different than other types of corporate debt. In most cases, individuals are protected from personal liability for business debts, even those for a business they own. However, federal law places a personal responsibility for ensuring that payroll taxes are paid on any individual who they can reasonably assume has the authority and ability to make sure the taxes are paid on a timely basis. This could mean officers and employees of the company, as well as possibly shareholders and even third parties, such as an outside accountant.
Unlike other types of taxes, payroll taxes - including FICA. Medicare and withheld income... read article
Potentially the most important legal aspect of operating a business involves payroll reporting and regulations governing the funds transfer process to the Internal Revenue Service. The IRS does offer a certain amount of business management latitude to business owners who must collect payroll and social security taxes. However, sometimes business operators make the serious mistake of not transferring the deducted funds when the operation faces financial difficulties, including failure to meet the legal requirement of matching the FICA deductions for Social Security. This is a very slippery slope when managing a business, and solid attention should always be given to details concerning legal fiduciary responsibilities. The IRS is very serious about recovering these funds, and many times fines and even incarceration can be part of the final decision. That is why it is imperative to have an experienced and aggressive IRS tax relief attorney representing your case.
Many businesses operate by allowing specific employees to sign financial instruments and and have access to bank deposit information. In most instances, these documents will also be included in the Internal Revenue Service investigators report. In addition, these particular employees will more than likely be a potential target of the investigation. The question... read article
Payroll taxes represent one of the largest single income sources for the federal government, as well as many state and local governments. For this reason, the IRS and other taxing authorities take the matter of filing and paying payroll taxes very seriously. Failure to properly follow the law on deducting payroll taxes, filing the required forms and submitting the money in a timely manner can result in substantial financial penalties and can even result in criminal prosecution that can result in convictions requiring the guilty party to spend time in prison.
While properly reporting and paying payroll taxes is a serious matter, it is also a complicated one. Complying with the various tax laws and regulations is a difficult process and many individuals and corporations can unknowingly make errors in complying with the taxes. However, it makes little difference to the government whether a payroll tax error was intentional or unintentional. The government still wants its money and will generally assess a business with a tax penalty regardless of the reason that law was not followed.
When the IRS or other tax collection agency finds... read article
For businesses that fail to pay their payroll taxes on time, the trust fund recovery penalty can cause severe harm. If the IRS decides to pursue this penalty, it may demand summary payment without any opportunity for a payment plan. Since the penalty is equivalent to 100% of the deficient amounts, it can be potentially devastating to a business. Additionally, anyone with signing rights to a business bank account can be considered liable for this penalty. Since this penalty can be so harsh, it is critical for those struggling with issues related to it to understand how to overcome the penalty. Below is a full overview of what business owners need to know about these tax issues.
1. Trust Fund
Unlike a trust fund used for inheritances, the IRS considers the segregated funds used for withholding to be a trust fund. When businesses fail to make their payroll tax payments on time, the IRS may come and demand immediate payment from this account. If funds are insufficient, the IRS may force the business to immediately shut down and seize assets directly from the bank account. Further, the IRS may be able to draw funds directly out of the bank accounts associated with... read article
While for most, the great recession is thankfully in the rear view mirror, for many business owners who struggled and cut corners to scrape through, the IRS has become their next serious hurdle to overcome.
Florida was hit particularly hard by the economic downturn and this forced many business owners to make difficult choices - including robing Peter to Pay Paul by using the payroll trust fund for delinquent bills rather than paying federal taxes. Many intend on catching up the next month but find it impossible to do so. When it comes to payroll taxes, it will not go unnoticed by the IRS for long and then the business is in more jeopardy as the IRS reserves it's harshest collections efforts for the payroll trust fund penalty.
When employees get their paychecks from their employer, they may notice the types of taxes that are being withheld from their check each time they get paid. Those taxes are held in the payroll trust fund. Those types of taxes would include federal income taxes, Social Security, and Medicare. The funds that are removed for those taxes will go into a payroll trust fund to later... read article
The Trust Fund Penalty act was enacted in 1998 to assist in collecting back payroll taxes due to the government. These taxes can include payroll or federal excise taxes. A trust fund penalty recovery could spell disaster for the entrepreneur, corporate manager, director, officer or employee who fails to pay their taxes. The general rule for this that any person required to collect, truthfully account for and pay over any tax imposed by this title who will fully fails to collect such tax, or truthfully account for and pay over such tax or will fully attempts in any manner to evade or defeat any such tax payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over.
Anyone who has a degree of responsibility can be liable regardless of title which is included as a director who is not an officer or employee as long as he was responsible for the payment of the withholding taxes. The IRS can asses those who are in the corporation who they find to be both willful and responsible for the... read article
Many people from all walks of life can end up with unwanted attention from the Internal Revenue Service. From the average Joe to self employed professionals to officers in large corporations. Even the odd politcian here and there ends up in the spotlight for serious tax problems.Further more tax problems also come in all shapes and sizes with many causes – everything from not filling, filling incorrectly, owing back taxes, payroll tax problems or even criminal tax evasion.
The one thing troubled taxpayers have in common is not their problems but the solution. IRS Tax Lawyers. IRS tax lawyers have the knowledge and experience to get federal tax problems back under control.
It’s important to note not every tax problem is the same, not every resolution will be the same, but overall there are a few main programs tax lawyers will relay on for many cases and they include most notably the offer in compromise, innocent spouse relief, installment agreements, currently not collectable or hardship status, penalty abatement, bankruptcy protection and reasonable cause.
A skilled IRS tax attorney will know which of these programs will be the correct choice depending on the circumstances the taxpayer is in. Many people have seen... read article
If your Florida business has been drawing from the payroll trust fund to keep your lights on you will need help from a local payroll tax lawyer.
Few tax problems get the IRS’s attention like payroll tax issues. The IRS will pursue any laps in the payroll trust fund payments aggressively and the consequences of failing to either satisfy the amount owed or respond with legal representation will be severe.
If you are using the payroll trust fund money from your employee’s paychecks, it may seem to you a convenient way to get by in a tight spot, but the IRS will look at this as stealing from both your employees and the Internal Revenue Service at the same time!
Further more the collections efforts the IRS will employ to settle the tax debt are ruthless. They simply do not care if your Florida business survives or not – they want their money at all costs and will put a padlock on the doors and auction off all of the businesses assets to get it.
There is hope however! If you act before it’s too late a skilled Florida payroll tax attorney can put the collections efforts on hold while your tax settlement... read article
Are you worried about your IRS problem? Losing sleep? Join the club. I hear that a lot. People will sit up at night and let their IRS problems eat away at them, night after night…causing them to lose sleep.
Is your IRS problem worth sacrificing your health…or your life? Stress can be a killer. Literally. Stress can lead to heart attack, hypertension, stroke, cancer, diabetes, depression, obesity, eating disorders, substance abuse, ulcers, irritable bowel syndrome, memory loss, autoimmune diseases (e.g. lupus), insomnia, thyroid problems and even infertility.
Procrastinating and hoping that your IRS problems will just go away is causing you a boatload of stress…But chances are that you may not have considered what that stress is doing to your body on a long-term basis.
What about the effects on your marriage? Numerous studies have shown that the money problems are the #1 source of arguments in marriage. Money problems caused by credit card debt, loss of a job, unforeseen expenses – you name it...all of these can be stressful on a marriage. But if you toss an IRS problem into the mix, you may have a recipe for disaster.
The IRS has more far-reaching power than any collection agency could. So... read article
Running a company or just running the personal finances is not always going to be so easy. In fact, those who do not follow the law and pay their taxes might run into a lot of trouble with the IRS. There are many out there who will turn to a tax attorney for the right amount of help. There are numerous tips to look into before hiring an individual for the much needed job. Those are in need of various services including strategic tax planning will need to make sure that they use this guide right now. This is the best way to seek a tax attorney - hire a business tax attorney within the shortest amount of time possible. Take note of the services that are offered to individuals and how the professional will be able to help. The sooner the search begins, the sooner the taxes can be taken care of so get started.
It is important to sit down and assess the current needs. Those who are thinking of opening their own business do... read article