If you own a business and fail to file and/or pay your payroll taxes the consequences will escalate. Unpaid payroll taxes will create debt and penalties, and both will have interest until they are paid off. If a business owner willfully does not file or pay payroll taxes, it might even be considered a federal crime.
The penalties assessed on unpaid payroll taxes accumulate quickly and if business owners do not act immediately they might find themselves out of business. By resolving payroll tax debt problems, business owners can protect and ensure the future of their companies. With payroll tax issues, money is not the only problem, resolving these issues can save a company.
It is necessary for business owners to file and pay payroll taxes to the Internal Revenue Service. Payroll taxes can include income taxes, Social Security taxes, and Medicare Taxes. The IRS requires employers to withhold these taxes from the wages of their employees, and that the employers make a similar contribution. Payroll taxes programs such as; Social Security, healthcare, unemployment compensation, worker’s compensation
The IRS places priority on collecting unpaid payroll taxes. This means that the IRS believes that it is more important to collect on unpaid employment taxes over income taxes. This is because payroll taxes are considered a trust tax and can impose harsh penalties because employers technically hold the employee’s money in a trust until they deposit the taxes. Business owners must make federal tax deposits within three days of the payroll checks being issued.
Since payroll taxes are trust taxes, the IRS views non-filing and non-payment as a serious crime. If you find yourself in this situation, contact an experienced lawyer who understands the tax laws. The IRS makes unpaid payroll tax investigations very difficult, and will often reject Offers in Compromise or Installment Agreements to pay back the payroll tax debt.
If your business has not filed or has not paid payroll taxes, you risk losing your business, federal tax liens and wage or asset levies. Working with an experienced IRS tax attorney can help with a favorable outcome in this accelerated collections process.