Are You Afraid of Being Held Personally Responsible For A Payroll Tax Liability?
As an employer, you have a fiduciary responsibility to properly report and remit all withheld payroll taxes to the IRS. Failure to do can result in a Payroll Tax Liability and accrual of 941 tax debts or employment tax debts. When this happens, you can expect the IRS to take aggressive and decisive action to collect the debt. This could mean shutting down your business and selling your assets or assessing a trust fund penalty on the business or “responsible party.”
In the eyes of the IRS, anyone who “willfully and knowingly failed to collect, account for, and/or pay the trust fund taxes” is liable and must pay the Trust Fund Recovery Penalty (TFRP) which is equal to 100% of the unpaid balance of the payroll tax debt.
Payroll Tax Liability: Responsible persons can be nearly anyone within the business including:
- Business owner
- Private accountant
- Board member
- Corporate officer
- Other employee
- Third party group responsible for handling payroll and taxes
Individuals who are often viewed as priority suspects includes anyone who signs tax returns, fills out form 941, signs SS-4 for obtaining an EIN, signs checks, etc.
If you have been contacted by the IRS as part of an investigation to determine your role in your company’s back taxes, call the Krus Law Firm as soon as possible. If the IRS discovers that you were directly involved in not paying payroll taxes, you can bet that they will go after your personal finances and assets to ensure the debt is fully recovered.
Payroll tax attorney Michael Krus has represented companies with payroll tax debt for over a decade.
- Prepare you for 4180 Interview with revenue officer
- Negotiate an installment agreement or “in business” offer in compromise with IRS
- Get you back in compliance with federal and state tax law to reduce the possibility of future tax liability problems.
The payroll taxes you withhold from your employees must be held in a trust fund so that you can pay the federal government later on behalf of your employees. Trust fund taxes include
- Federal and State Income Taxes
- FICA Taxes: social security and medicare taxes
- Federal Unemployment Taxes
- State Unemployment Taxes