What are payroll taxes?
Payroll taxes are taxes paid on the wages and salaries of employees. The taxes due are Social Security, Medicare, and state & federal income taxes. An employer is responsible for paying half of these. The other half are paid by the employees. Employers withhold these, along with income tax based on the number of exemptions claimed by the employee. The part of payroll taxes that an employer is withholding (or is supposed to withhold) and forwarding to the IRS is called "Trust Fund Taxes."
How do payroll tax issues arise?
In most of the cases that we have dealt with, the issues arise from cash flow problems. Cash flow problems can be caused by a client that burns you, a natural disaster, a lawsuit, or employee embezzlement, to name just a few reasons. It could be that the business owner sees that the business is struggling but doesn’t want to lay off employees, so they skip a quarterly payroll tax payment. All of a sudden they are trying to play ‘catch up’ with the IRS while still trying to keep their business afloat.
Who is liable for unpaid IRS payroll taxes?
Those responsible for paying the quarterly payroll taxes, but ultimately the company may be responsible for paying the entire amount back. The IRS has to think in terms of “collect-ability”…what is going to give them the best chance of getting their money back? Many times a business may not have many assets or much income, and cannot afford to pay the taxes. In that case, the IRS will assess as many individuals a trust fund tax as possible.
What if someone stole or embezzled money from me?
An IRS Trust Fund Assessment interview will most likely occur. This is where we fight to help you avoid assessment.
If someone embezzled or stole money from you, your interview with the Revenue Officer is a critical piece of the puzzle. You can have legal representation at the interview, and we highly recommend it. The IRS needs to know the whole story of your business — not just the short-sighted, easy story. It is possible to avoid a personal assessment, although your business will still owe money. It is also possible to negotiate for less.
Can you file an Offer In Compromise to settle my payroll taxes?
Yes. It is difficult, but it is possible. We will also look into alternatives that may be a better option for you.
Does the IRS need a court order to come into my place of business?
No. If you have payroll tax debt, the first thing that will happen is you’ll get a visit from an IRS Revenue Officer. They will most likely show up at your place of business (they are required by law to make first contact in person). They may try to negotiate with you on the spot, but you are not required to agree to anything in that moment. Take time to get all of the details and gather as much information as possible. Then, contact us so we can successfully negotiate with the IRS.
In worst case scenarios, they actually can padlock your front door, seize your machinery and equipment, and intercept funds coming to you from your customers, all without a court order.
We can help you dig out from your problem and represent you, if necessary, when you are faced with an IRS interview.
We have a proven track record of success in helping thousands of taxpayers dig out of their tax troubles. With over 10 years of experience, we've developed a process. It works.
Contact us for help. Call us at 888-727-8796 or email info@irsmedic.com.
