Payroll tax problems: act before they become personal

Why payroll taxes are different

The income tax and Social Security withheld from employee paychecks belongs to the government the moment you withhold it. If a business does not deposit it, the IRS can assess a Trust Fund Recovery Penalty against the individuals responsible, which can include owners, officers and sometimes bookkeepers. That makes it a personal debt, even when the business is an LLC or corporation.

Common situations

• Payroll deposits missed or paid late during a cash crunch.
• Quarterly payroll returns (Form 941) not filed.
• Notices about balances after a payroll provider or bookkeeper left something undone.
• A business that closed with payroll tax still owing.

What we do

1. Find out exactly what is owed and for which quarters, using your IRS records.
2. Get filings current and make sure future deposits are on time.
3. Look for penalty relief on deposit and filing penalties.
4. Negotiate a payment plan or other resolution, and address any personal liability exposure.

If you run payroll through us or another provider, we can also review the setup so the problem does not repeat. Our parent firm, Hockett Tax, offers payroll services.

Related

• Offer in compromise
• IRS payment plans
• Unfiled tax returns
• Levies and wage garnishments
• IRS tax liens
• Penalty relief
• Audit and appeals