The IRS views failing to pay payroll taxes as the cardinal sin of tax delinquency because a large portion of the payroll taxes are your employees’ withholdings. Not paying your company’s payroll taxes is tantamount to stealing your employees’ money in the eyes of the IRS.
As a result, 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. They can drastically multiply the amount you owe in a very short time.
If you are behind on paying payroll taxes for your company, WATCH OUT!!! The IRS is extremely aggressive pursuing collection of this type of tax. They would rather seize your business assets, close you down, sell your assets at auction, and put you out of business than allow you to continue amassing additional payroll tax liabilities.
If you are behind on your payroll taxes, DO NOT meet with the IRS on your own. How you answer their initial questions can determine whether you stay in business or not. It is critical you hire a professional representative who knows how the IRS operates.
PAYROLL TAX PROBLEMS
When a business has an issue with failing to pay or failing to file payroll taxes, the IRS does not take the situation lightly. The consequences tend to be much worse for businesses than individuals – with an increased possibility of levies and seizures. First and foremost, it’s important to understand the specifics of this problem and what you can do to take care of it.
HOW DO PAYROLL TAX PROBLEMS HAPPEN?
If you own a business and have employees, you are probably all too familiar with the issues regarding calculating and paying payroll taxes. With all of the federal and state calculations for payroll taxes, it can be confusing to figure out how much to pay, how often to pay it and what to do if you find yourself in a situation where you can’t pay.
Many businesses either fail to calculate the correct amount of payroll taxes or fail to get their payroll taxes completed in a timely fashion. This leads to penalties, interest accruals and eventually, an unmanageable situation of business tax debt.
In addition to it being easy for a business owner to miscalculate or miss payments for payroll taxes, the state or IRS may not notice the problem for months or even years. Over that time, penalties and interest accrue while debt grows to the point that it becomes difficult to pay the taxes, penalties and interest in full.
WHAT CAN YOU DO?
If your business is facing payroll tax problems, you need to develop a strategy for resolution as soon as possible. You may be familiar with tax attorneys, but Enrolled Agents are more specialized tax professionals. To read more about what an Enrolled Agent is and how they can assist you with your tax issue