Law Office Of Mary E. King, P.L. Attorney and Counselor Of Law Because Life Should be Less Taxing ®
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Back Payroll Taxes - Get Help

Back payroll taxes is a serious problem don't let this wait another day.

The IRS takes this issue very seriously and will come down hard on anyone delinquent with payroll tax payments. Many business owners in the current economy are forced to make drastic measure including using the payroll tax fund to keep their companies operating then find themselves unable to pay the payroll taxes. IRS can and will do a variety of harsh options to recover the funds including closing the business and selling the assets! Worse still if the assets do not cover the amount owed the business owner is held liable for the remainder.

A knowledgeable tax attorney can step in and prevent the worst case from happening and negotiate a positive outcome for the business owner. If you owe back payroll takes don't wait another day, procrastination will make things worse fast. Call experienced tax attorney Mary E. King for your free consultation and get IRS help now!

Call the Law Office of Mary King P.L. at 941.906.7585 today.

Trust Fund Recovery Penalty

A trust fund recovery penalty might be known as the "responsible person penalty" in your area. It's also known as an employment withholding or sales. This can be one of the final blows that comes after a business has failed.

However, luckily for the person who must pay up is that it's much less than penalty, interests, or employment taxes owed by the employer. The only thing that this payment includes is what was withheld from the employees, or the trust fund amount. It does not include:

- late filing penalties, - deposit penalties, or - interest on above prior to assessment of recovery penalty.

Though there is an interest that will have to be paid on this penalty, it does not begin until the penalty is assessed against the person. Liability in Missouri, for instance, is the same amount due from the business or employer.

Personal Liability

Employees, directors, members, and managers are often not liable for the liability company obligations. However, they might be personally liable for sales taxes and certain employment taxes that might have been involved.

The personal liability as imposed by the IRS Code 6672 and R.S. Mo. 143.751 means that responsible persons have willfully failed to collect and pay the trust fund taxes. Willful in this meaning is to have knowingly paid other creditors before taking care of employment taxes. Responsible persons here means anyone who has the duty of collecting and paying the trust fund taxes. The trust fund taxes is what's withheld from employees, as mentioned before.

In Missouri, however, there are more statues on what makes a person responsible for paying the trust fund tax when the business fails. This is called strict liability. In 2012, their Department of Revenue and Division of Employment Security have decided that members of any LLC that is taxed as a partnership will be personally responsible for any unpaid LLC taxes or those that need to be collected.

Trust Fund Taxes in General

The trust fund tax will not include social security, FUTA taxes, late payment/deposit payments, or even interest before the assessment of liability. Income, social securities unpaid, and Medicare taxes that were to be paid to employees but were withheld are what constitutes trust fund taxes.

Interest starts on date of assessment.

Anyone included in the responsible persons category is incredibly liable for unpaid trust funds. Liability is only collected once, according to Service policy. However, it is unclear if this is a legally binding law. It does not come up often as an issue, but withheld employment taxes make this a difficult thing to keep track of.

Who is Responsible?

The responsible person is anyone who was "in charge of and has authority to decide which creditors to pay". Anyone who signs the SS-4 is a good target. Others include: - officers, - directors, - those who signed checks or can sign checks, - signed tax returns, - LLC members and managers, - signed for a tax ID or registration application, or - directed others to do the above.

Those who don't actually decide who gets paid could be outside the windows of liability. The bookkeeper is a good example. They prepare and sign checks but are told who to prepare them for.

Willful Failure

Before an assessment for liability takes place, it must be known that they acted willfully. Usually this means that they knew that taxes were due and owed, and that they chose to pay others instead of the IRS.


A list of possible targets is made to begin with. An interview will take place. The questions will determine what kind of liability you may have, if any at all. Based on this and a review of your documentations, IRS employees will recommend whether or not to press for trust fund penalties.


You can have an IRS appeals conferee review the assessment if you are unsuccessful in avoiding it in the interview. You could also appeal to court, but no guarantees on either.

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