What are Payroll Taxes?
You have failed to pay your employees’ payroll taxes to the government, so that you could have enough money to pay your operating expenses. Unfortunately, this is a very difficult situation for you.
The IRS regards the withholding of payroll taxes to create a trust fund for the benefit of the government and your employees. There is a fiduciary duty. Further, you have put the IRS in a difficult position. They must credit the employees for having paid the tax, even giving refunds, while they never receive the money to pay the taxes for which the employee gets credit.
In my opinion, the IRS is more strict in enforcing collection of this type of tax than other types of taxes. This means that you need professional help from an Austin tax attorney such as myself right away.
IRS Collection Methods
The IRS may seize the assets of your business and, therefore, close the business. Regardless, they will file a lien quickly. They may levy your bank accounts, and take all of the cash that your business needs to operate. This will happen if you even hesitate about entering into an installment payment plan. I have decades of experience handling this kind of rapid and harsh collection action by the IRS, giving businesses the opportunity to keep running and survive.
If you enter into a payment plan, and you continue to fail to pay over the payroll taxes, you are in special collection trouble. If the new liability that you create is greater than the payments you are sending to the IRS, you have pyramided your liabilities, with the total liability getting even larger. The IRS will act quickly, and shut you down, in many cases. I know how to handle these situations, always with the goal of helping my clients keep their businesses open.
By statute, the IRS has the power to make you personally liable for your company’s payroll tax liability. This is all the more reason to have a tax attorney represent you as soon as possible. If a persuasive case can be made that repayment will occur, I can forestall the implementation of personal liability.
If this is not possible, I try to defend you from being assessed personal liability. If you did not have knowledge that a payroll tax liability was being created, we have a good chance. If you did not have the power to see that the payroll tax was paid to the government, you have a good chance. I have handled these circumstances effectively on many occasions.
Contact Austin Tax Attorney John McDuff
Handle your payroll tax problem successfully, with your business staying open, and without you personally liable. Contact me, John McDuff, Austin tax attorney, at 512.457.1177.