Payroll Tax Issues

One of the most common tax issues facing businesses is not being able to pay their payroll taxes and therefore they become subject to very harsh collection activity by the IRS to collect back owed payroll taxes. When a business is hit with hard financial times, they often have to make tough decisions about whether to pay their employees or pay taxes. There are also many businesses that are sidelined with a payroll tax issue because of a dishonest employee who was put in a position of trust to pay the payroll taxes but failed to do so. By the time the business owner finds out, penalties and interest already have started to accrue, making the repayment of payroll taxes even more difficult. Although your business cannot avoid repayment of payroll taxes entirely (even if you have incompetent or dishonest employees) we may be able to significantly reduce penalties and interest. Another important issue that business owners must be aware of is that even if you are a corporation or a Limited Liability Company, the IRS may be able to collect a portion of the payroll tax debt directly from the individuals owners, officers, and employees of the business. This is known as the trust fund recovery penalty, or Code Section 6672 penalty. We may be able to argue on your behalf that you are not a responsible officer subject to the trust fund recovery penalty and thereby negotiate with the IRS to have them drop the trust fund penalty. 

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