February 24, 2010 - William L. Henry IV
Small payroll tax problems can become big payroll tax problems very quickly. Our IRS tax attorneys discuss payroll tax problems and solutions in this article.
As an employer you are required to withhold tax from your employees' paychecks and deposit the tax with the IRS. This makes IRS payroll taxes a trust tax, which means that as an employer you act as a fiduciary.
Delinquent IRS payroll taxes will cause you to incur penalties very quickly. These penalties can be huge. The IRS assigns a high priority to collection delinquent payroll tax and the debt will not go unnoticed for long. The IRS is very aggressive in collecting back payroll taxes. Further, not only is your business liable, but the IRS can hold the officers and owners of the business liable as well (responsible persons).
Because you act as a fiduciary, falling behind on your payroll tax can be considered theft and you could be prosecuted. Further, your business can be seized and liquidated to pay back payroll taxes. Needless to say, IRS payroll tax problems are very serious.
Dealing with the IRS when you are behind in your payroll taxes is much more difficult than dealing with income tax problems and you need competent representation. Possible solutions include using bankruptcy to restructure the debt and provide some breathing room, submitting an offer in compromise, installment arrangements, or penalty abatement.
Robinson & Henry maintains offices in Colorado Springs, Castle Rock, and Denver. A tax attorney is available to meet with you in person or over to the phone to discuss your situation. Please contact one of our IRS tax attorneys to discuss your payroll tax problems and schedule a free consultation.