Payroll Tax Resolution Service
Strategic Assistance for Businesses Facing Tax Challenges
Employers sometimes fall behind on their payroll taxes, which are taxes assessed by and owed to the federal government. Businesses must pay Social Security, Medicare, and unemployment taxes. The Internal Revenue Services (IRS) enforces compliance with the tax obligation. Often, business leaders and entrepreneurs are unsure about how to recover from the overdue payments. If you are a business owner or financially responsible for a business, the IRS may come after you for the overdue taxes. When a payroll tax resolution is managed incorrectly, the failure to pay payroll taxes can potentially result in seizures, liens, and prison time. It is critical to respond with the help of tax professionals who understand payroll tax resolution. At Enterprise Consultants Group, our Los Angeles payroll tax lawyers are ready to help. We represent clients throughout California and across the U.S.
The Payroll Tax Resolution Process
Employers are required to withhold income taxes, Social Security taxes, and Medicare taxes from an employee’s wages. The part that is withheld and the employer’s contribution to Social Security taxes are often called payroll taxes. The Internal Revenue Code requires an employer to gather and pay any taxes that were withheld from employee wages. These taxes should be deposited in a qualified bank or financial institution so that they can be transferred to the IRS.
There are significant IRS penalties for failing to pay the appropriate payroll taxes. Often, a failure to pay payroll taxes is a result of an employer not keeping adequate documentation or failing to make careful calculations. Sometimes owners use money that should be disbursed as a payroll tax to pay for business expenses, but payroll tax money does not belong to the business. Taxes need to be properly taken into account and paid to the government. If you fail to do so, or if you try to use the money for some other business purpose, you can get into trouble with the IRS. You should promptly consult a payroll tax attorney at our Los Angeles firm if you are in this situation.
It is crucial to recognize that there is a problem with payroll and get started on creating a solution through payroll tax resolution. If you fail to resolve the tax issues, the amount owed will grow in a compounding fashion. Those penalties result in interest accrued and can increase exponentially unless a payment solution is created to solve the problem.
You can be held accountable if you are supposed to collect or withhold income and employment taxes or pay collected excise taxes for a business, and you willfully fail to do so. If you are involved and potentially responsible for a business deemed liable for a failure to pay the IRS, you can be held financially accountable and sanctioned with a Trust Fund Recovery Penalty. The penalty is calculated based on unpaid income taxes that were withheld along with the employee’s part of the withheld FICA taxes.
Procedures
If the IRS determines that you are the person responsible for making payments, it will send a letter specifying that it is assessing a Trust Fund Recovery Penalty against you. You have just 60 days to appeal from the letter’s date. You should retain an experienced Los Angeles payroll tax attorney and respond. If you do not respond, a penalty will be assessed, and payment will be demanded. Once a penalty is imposed, and no appeal has been filed, the IRS is allowed to begin a collection action. It can file a federal tax lien against your personal assets or take other steps to collect the debt. It can even shut down your business so that it can sell off assets to pay the debt.
Solutions
The IRS has an offer in compromise program, which is one solution that can be utilized, although it is more often utilized by individuals. The offer in compromise program requires documentation, and it can take a significant chunk of time to be investigated and accepted by the IRS. A more attractive payroll tax resolution may involve creating an installment agreement through which you pay back the debt that you owe the IRS in full or partially. The IRS Fresh Start Program may allow you to enter into an installment agreement without submitting financial documents, and there is some flexibility regarding the period within which you are supposed to repay what you owe.
