How Does IRS Pursue Payroll Trust Fund Penalty Funds?
You have probably heard stories about tax indictments and convictions. It is scary to hear about those things because you may be worried about your own taxes. The IRS can be aggressive when they are pursuing income taxes. However, they are even more aggressive when it comes to collecting payroll tax.
The money that is withheld from an employee's paycheck is supposed to go straight to the IRS. If the IRS does not receive this money, then the losses will quickly add up. The money that is withheld from the paycheck is often referred to as trust money. This is money that belongs to the government. Even if the employer has a good reason for not sending this money to the IRS, they can still face serious penalties.
For example, some people use their payroll tax in order to cover business expenses. This may seem like a good way to use payroll tax because a business has to pay bills in order to stay open. However, this excuse will not be accepted by the IRS.
People can also get in trouble for paying the payroll taxes late. In some cases, the payroll services are responsible for the missed or late payments. That is why businesses have to be careful about who they hire. The IRS will hold every person involved responsible. The IRS can also give a Trust Fund Recovery Assessment. You can held responsible even if you did not know the IRS was not being paid taxes.
The IRS may pursue everyone in order to see who comes up with the money first. Directors, officers and people who sign the check may have to pay a payroll trust fund penalty. The IRS can also pursue someone who makes decisions regarding the pay.
When multiple people are faced with paying a payroll trust fund penalty, they may attempt to blame someone else for the bill. One person may get stuck paying the bill while the others do not have to pay anything. The government will still attempt to collect taxes from the company.
The IRS wants to make sure that this type of thing does not occur again. The government can close down the business in order to ensure that this type of thing does not occur in the future. In some cases, the government may pursue legal action and attempt to file criminal charges. The IRS wants to simply stop the situation from getting worse and get their money. They do not want you to get deeper and deeper in debt.
You can assuage the situation by making small payments on your tax debt. The Justice Department may seek an injunction in order to ensure that all tax returns are filed within a timely manner and deposits are made. You should try your best in order to avoid getting in this type of situation.
You may want to choose a payroll service that does not ask you if you want to use the payroll tax for something else. This will help you stay ahead of your payroll taxes.
Reasons to Hire a Payroll tax Attorney
Dealing with payroll tax can be stressful. You may be worried about all of the things that can potentially happen if you do not pay your taxes. However, you can get relief by consulting with a payroll tax attorney. There are a number of options that will help you get rid of payroll tax debt.
For example, you can get an Offer-in-Compromise. This is an agreement between the IRS and the taxpayer that allows the debtor to pay less than the total amount. You can also get a deferment, which will give you time to get back on your feet.
You can set up an installment agreement with the IRS. You can get up to 10 years to pay back your taxes. Everybody's situation is different. That is why your attorney will assess your situation and recommend the best course of action.
Many businesses think that it is best to file for bankruptcy. However, it is important to note that this will not solve your tax problems. If you cannot pay all of your tax debt, then you will be better off making partial payments. You will be able to reduce your personal liability.
Your attorney will let you know about the best way to pay off your taxes. This is important because many businesses have paid thousands of dollars and later found out that none of that money went towards the tax balance.