Delinquent Payroll Taxes: Biggest Mistakes Small Businesses with Payroll Tax Problems Make

Payroll tax problems can close a business overnight and lead to criminal sanctions including prison time. As the IRS grows increasingly aggressive in their collection attempts for past due payroll taxes, struggling business owners with delinquent payroll taxes need to know how to protect the future of their businesses.

Read on for the biggest mistakes small business owners make when dealing with payroll tax problems:

  • Ignoring potential payroll tax penalties. The stakes are huge – along with being hit with hefty delinquent payroll tax penalties, many business owners with delinquent payroll taxes have found their business’s doors padlocked overnight and facing criminal sanctions including prison time. And with the federal government looking for ways to fund deficit-reduction activities as well as close the growing tax gap, the IRS is taking a closer look at employment tax returns, and stepping up increasingly aggressive efforts to collect unpaid payroll taxes.
  • Talking to the IRS before talking to a professional tax attorney or tax resolution specialist. Oftentimes business owners who take matters into their own hands may self-incriminate during their conversations with IRS agents and make their payroll tax problems even worse. An experienced professional will truly understand what makes your businesses tick and will make sure that you have the cash flow and ongoing business necessary to keep your doors open. With no other sources of working capital, your company will go out of business when you can’t pay rent, utilities, and other operating expenses – it would be just a matter of time.
  • Not taking payroll tax penalties seriously enough. IRS levies on your bank accounts and wages can cause you to lose your business. Payroll tax problems can be the “kiss of death” for many business owners. IRS penalties from delinquent payroll taxes can add up to about 33% PLUS interest in just 16 days after you have filed the 941 (payroll tax return) past the due date and didn’t pay–this will drastically equate to a large sum if you ignore the problem for a prolonged period of time.
  • Wasting time. Since the IRS is very aggressive collecting delinquent payroll taxes, you need to come up with a way to pay them off fast. The IRS can levy a Trust Fund Recovery Penalty (TFRP) that imposes a 100% penalty on responsible third parties for delinquent payroll tax penalties. This is considered a civil penalty that only applies to collected taxes (like Social Security) and withholdings and does not apply to the employer’s portion of FICA, Medicare, 940 taxes or income taxes of the corporation.
  • Risk your personal liability to payroll tax debt. If the IRS can prove that you were willful and intentionally didn’t file and/or pay your employment taxes, it may be considered a federal crime. One or more persons may be assessed with the delinquent payroll tax penalties from the IRS for delinquent payroll taxes – they can be assessed jointly and incur several liabilities. You do not have to be an officer of the company to be liable.The IRS is the most aggressive collection agency with the ability to pierce the corporate veil and go after the owners/shareholders/members individually. Liability for delinquent payroll tax penalties can be assessed against CPAs, EAs, accountants, and bookkeepers.

Don’t let the IRS levy your funds and take control of your cash flow – contact a tax resolution specialist to  resolve your payroll tax penalties so that you can avoid the long-term devastation they can cost your company.

If you’re already in trouble with the IRS for delinquent payroll tax penalties, what do you do next? Don’t panic. Just keep in mind that there’s a solution to every delinquent payroll tax problem. Whether you owe $700 or $7 million in delinquent payroll tax penalties, you can find a way out, sometimes for a small fraction of what you owe, sometimes without paying a dime. The key is contacting a tax resolution professional as soon as you can. A consultation with a good tax attorney or tax resolution specialist can turn your delinquent payroll tax nightmare into a distant memory so you can go back to the business of your small business, creating the American dream.

Learn more about how you can protect your business from payroll tax problems.

Call us at 1-866-IRS-PROBLEMS or 1-866-477-7762.  Tax Resolution Services will help you find tax relief!

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2 Responses to “Delinquent Payroll Taxes: Biggest Mistakes Small Businesses with Payroll Tax Problems Make”

  1. Tony C Says:

    Good article. Taxation, the IRS, and everything involved can be a huge detriment to small business owners. You have to know your laws. Consider a consultant or something like The Tax Club or something It’s usually worth the trouble. Write on!

  2. Top Tax Help Resources for Business Owners Facing Employment Tax Audits–The IRS Is Ready, Are You? | Tax Attorney and Tax Resolution Services: IRS Help Blog Says:

    [...] The Biggest Mistakes Small Businesses Make When it Comes to Payroll Taxes There are a few things every business owner should know when it comes to payroll tax problems. We’ve gathered some of the biggest mistakes business owners make to help you avoid getting in deep with the IRS. Don’t let the IRS shut your business down, find out what you can do to protect yourself. Read more. [...]

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