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Tax Help For Business Owners: Can the IRS Go After You Personally For Unpaid Payroll Taxes?
By Michael Rozbruch | September 8, 2010
Are you a business owner with your own employees? Are you following the IRS tax rules for filing and paying annual payroll taxes? In order for you to stay in business and out of IRS trouble, there are a few things you must know about how far the IRS can go to collect unpaid payroll taxes from you.
Many people do not realize that the IRS can get personal when it comes to collecting unpaid payroll taxes or employment taxes.
Congress gave the IRS’s enforcement power real teeth in the Trust Fund Recovery Penalty (TFRP). Payroll and excise taxes are trust taxes, meaning the employer is obliged to collect these revenues and pass them on to the IRS. The IRS may assess this penalty against anyone-including CPAs, accountants, and bookkeepers-who willfully fails to collect or pay to the IRS withholding taxes as well as collected excise taxes.
“Willfully” is the key word here. The responsible person or persons must have known about the unpaid employment taxes and have willfully failed to turn those over to the IRS. This can be a problem with small and mid-size businesses that are struggling economically and have no other funds to pay their creditors than to dig into their tax money.
When seeking to assess the TFRP, the IRS uses a two-part test to determine who exactly was responsible to collect and pay the taxes and whether that person or persons willfully failed to perform this duty. The IRS can pursue the individual or individuals whether or not the business is still in operation. Once the TFRP is assessed against the responsible individual or individuals, the IRS will proceed with collection efforts.
Such individuals may attempt to negotiate an Installment Agreement (IA) or may qualify for the IRS Offer in Compromise (OIC) program to settle delinquent payroll taxes. But the surest way to successfully obtain business tax relief is to seek professional help from a tax attorney, CPA, or Certified Tax Resolution Specialist who is best positioned to respond to a TFRP assessment on an individual’s behalf and who is best able to negotiate a permanent tax-relief schedule with the IRS.
I urge you to read more IRS tax help FAQs here.
If you find yourself in IRS trouble, don’t hesitate to contact a professional. Our team of expert tax attorneys and Certified Tax Resolution Specialists are here to help you settle your tax debt for good. Give us a call at (888) 259-1516 or visit www.taxresolution.com for a free tax relief consultation.
Topics: Delinquent Payroll Taxes, FAQs, IRS Payment Plan, IRS tax relief, hiring a tax attorney or Certified Tax Resolution Specialist, tax attorney, tax help | No Comments »