Businesses >> Business Payroll Taxes
Every business that has employees becomes obligated to withhold various taxes from those employees (aka trust fund taxes) and to remit them to the taxing authorities along with certain other employer taxes (such as the matching portions of Social Security and Medicare taxes). The taxing authorities view each employer as a trustee of the employees' funds. Because of this view, the taxing authorities are very aggressive when it comes to collecting delinquent payroll taxes. It is common for the IRS and/or state taxing authorities to take all forms of enforcement action available to them to prevent unpaid trust fund and/or other payroll tax liabilities from growing. This enforcement action includes levies, liens and sometimes even shutting down failing businesses.
Not only is your business at risk, but you may have personal liability as well. Typically, a sole proprietor and usually a general partner in a partnership are personally liable for all amounts of unpaid payroll taxes (both the "trust fund" and employer matching portions, as well as all penalties and interest assessed and accrued). When a business has previously organized into some other ownership structure (such as a corporation or limited liability company), then the "responsible parties" of those entities are generally personally pursued for only the unpaid "trust fund" taxes. This is one reason why it can be a great idea to form a business entity for your existing business that is separate and apart from yourself individually. The IRS will attempt to conduct a responsible party interview with all of the individuals associated with a business entity for purposes of determining which persons are responsible and which are not. Those deemed responsible will be assessed a civil penalty (aka trust fund recovery penalty or 100% penalty) for the unpaid trust fund taxes to date.
We are available to assist your business to satisfy the demands of the taxing authorities and to remain in business while doing so. We are also available to represent you individually before the IRS through the trust fund recovery penalty process, which could dramatically reduce the chance that a penalty will be assessed against you.
If you need help resolving business tax debt, contact our office for help.
