Payroll Tax Liabilities are Serious!

Paying and Reporting Payroll Taxes
If your business has employees, it must withhold payroll taxes and deposit those funds with the IRS. Payroll taxes consist of federal and state income tax, and social security and medicare taxes. Employers are also responsible for matching social security and medicare taxes, and for paying federal and state unemployment taxes, and an additional medicare tax paid by employers. Employment taxes are reported quarterly on IRS Form 941.
Trust Fund Recovery Penalty
The IRS will aggressively seek to collect any payroll taxes a business fails to pay on time. When an employer withholds payroll taxes, it holds those amounts in trust for the government. To collect those trust fund taxes, the IRS may assess a Trust Fund Recovery Penalty against all responsible persons in an amount equal to 100% of the outstanding payroll taxes. You cannot discharge a Trust Fund Recovery Penalty through bankruptcy!
The IRS may assess a Trust Fund Recovery Penalty for the full amount of the unpaid payroll taxes against any person who is responsible for collecting or paying the taxes and willfully fails to collect or pay them. To establish willfulness the responsible person: The IRS does not have to show evil intent or a bad motive to hold a responsible person liable. If your business has shown a pattern of failing to pay payroll taxes or file quarterly IRS Form 941s, the IRS may try to shut your business down. From their perspective, a business that cannot remain current with its payroll tax and filing obligations should be closed to prevent the outstanding balance from increasing. After the IRS closes the business, they will assess a Trust Fund Recovery Penalty against all of the owners, officers, and managers and other responsible persons, and seek to collect the outstanding payroll tax liabilities from their personal assets. Do not delay in addressing payroll tax issues. A late or wrong response can lead to significant personal liability. Call the Colorado Springs tax attorneys at the Business Law Group today!
A responsible person can include:
The IRS May Seek to Shut Your Business Down
Call the Colorado Tax Attorneys at the Business Law Group
Common Forms