If You Own a Business, You must Pay Payroll Taxes
By: Chintamani | Posted: 23rd November 2009
As an employer, you must pay payroll taxes; there is no way around it. It is your responsibility to make all payroll tax deposits.
The Internal Revenue Service has been cracking down on payroll tax compliance. If you own a small business it is important to you to avoid an Internal Revenue Service audit and the resulting penalties if you are found non-compliant with payroll tax regulations.
You need to know everything you can about payroll taxes. The Internal Revenue Service recently marked small business as the biggest target for tax compliance enforcement. Small business is particularly being targeted for compliance with payroll tax regulations.
Borrowing against your payroll taxes is illegal. You cannot use your employee's withholdings for anything other than paying the IRS. If you are found to be borrowing against payroll taxes, you risk loss of your business, your assets, and your freedom. Employers are often jailed when caught in this type of violation.
When it comes to payroll tax enforcement, the Internal Revenue Officer has the power to seize your business and put you behind bars. The Internal Revenue Service's power in the enforcement of payroll tax collection is unyielding. They can padlock your business, seize your equipment, and even intercept payments due you by customers. You cannot ignore payroll tax issues, or you are going out of business.
The Internal Revenue service can charge you with failure to file, deposit, or pay your payroll taxes. Penalties of 33% can apply just 16 days after the due date. Penalties and interest grow even more rapidly from there. You can soon find yourself so bogged down in tax payments, penalties, and fines that you are forced out of business. It doesn't matter how your business is structured, as an LLC, Limited partnership, General Partnership, Incorporation, whatever structure you have is ultimately vulnerable to collection of payroll taxes.
The IRS can assess the Trust Fund Recovery Penalty. The money you collect for payroll taxes is the withholding from your employees. So, you are technically holding this money in trust to turn over to the IRS on behalf of your employees. The Trust Fund Recovery Penalty is assessed against your company when you fail to hand the payroll tax money over in a timely fashion.
The Trust Fund Recovery Penalty is assessed at 100%. In other words, if you have $5000 in unpaid payroll tax, the Trust Fund Recovery Payment will be assessed at $5000 on top of the $5000 you owe. The Trust Fund Recovery Penalty doubles your payroll tax liability.
If you find yourself in trouble with payroll taxes, you will need to contact a tax attorney right away. If you hire an attorney in time, they may be able to help you pay your payroll taxes to date and avoid the Trust Fund Recovery Penalty.
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Tags: going out of business, small business, target, failure, irs, assets, padlock, incorporation, due date, compliant, internal revenue service, trust fund, limited partnership, tax payments, payroll taxes