Payroll taxes include 940 and 941 taxes, which are federal income taxes withheld from employee’s wages, Social Security, and Medicare taxes. The IRS will also assess the Trust Fund Recovery Penalty against anyone responsible for collecting, accounting or paying payroll taxes.
The IRS is very aggressive in collecting payroll taxes that have not been filed or paid. Because of the steep penalties and interest, payroll taxes can mount up quickly. The IRS views the failure to pay payroll taxes as one of the most severe types of tax issues because a large portion of the payroll taxes are your employees’ withholdings, and therefore the IRS interprets the non-payment of a taxpayer’s company payroll taxes as stealing your employees’ money. Criminal actions could apply.
Failure to submit your company’s quarterly federal payroll taxes will bring aggressive action from the IRS, threatening the possible loss of your business. Without the skilled tax professionals of Platinum Tax Defenders working on your behalf, you can miss the opportunities available to you.
Every employer must also pay both state and federal taxes for Unemployment Benefits on each employee. These taxes protect the employee in the event they lose their job, enabling them to draw unemployment income. If this is not done, than the IRS will assign a revenue officer to your case and will begin collection actions against your company.
Penalties for failing to pay your payroll taxes and filing your payroll tax returns on time are much more severe than other types of penalties; therefore, as a result, the amount you owe will grow quickly due to penalties and interest. Delaying payroll tax debt repayment will only result in escalating penalties and fines. It is imperative that you have a competent tax professional on your side.
If you continue to operate without paying these current payroll taxes, pay your outstanding payroll taxes, or continue to have unfiled payroll returns, the IRS may seize your business assets, close you down, sell your assets at auction, and put you out of business, rather than allow you to continue amassing additional payroll tax liabilities. The IRS views this as a betterment of society rather than allow your company to continue to “steal” from its employees.
It is more difficult to negotiate a payroll tax resolution than income tax resolution as the IRS does not really care if your business survives. Offer in Compromise settlements for payroll tax problems and business tax problems are also often rejected. However, this is not to say that there are other options that may better suit you and your circumstances.
Further, the IRS may better allow an Offer in Compromise if your business is no longer operable and therefore the value of the business, its assets, and its revenue are dramatically decreased.
To resolve these types of situation, the taxpayer needs the experts of Platinum Tax Defenders to analyze your documents, articulate with the revenue officers, and conduct an in-depth look into your records to determine what tax relief may be available to you.