At Daniel Rosefelt & Associates, we have substantial experience representing employers, and their officers and owners, in payroll tax cases.
When representing you, we work diligently to develop a tax debt solution designed to protect your business and your personal assets. This could include the negotiation of a payment plan with the IRS, an offer-in-compromise, a voluntary settlement under the voluntary classification settlement program (VCSP) or another comprehensive solution that meets your goals. Our firm is also experienced in defending business entities against forcible collection action initiated by IRS revenue officers as well as other related payroll tax problems.
What Are Trust Fund Taxes?
The Internal Revenue Code requires every employer to withhold Social Security taxes, Medicare taxes and income taxes from the wages of its employees — commonly referred to as “payroll taxes” or “employment taxes.” The combination of payroll taxes actually withheld from an employee’s wages and the income taxes withheld from an employee’s wages are collectively referred to as “withholding taxes” or “trust fund taxes.” The term “trust fund taxes” is used because these taxes are theoretically held in trust by the employer until paid over to the IRS as described below.
Employers’ Obligations Regarding Payroll Taxes
Under the Internal Revenue Code, an employer is required to collect, account for and pay trust fund taxes. These amounts are to be deposited in a qualified bank or financial institution for transfer to the IRS.
Along with the payment of these taxes, the employer is required to file an employer’s quarterly federal tax return, commonly referred to as a “941 Return,” and an employer’s annual federal unemployment tax return, commonly referred to as a “940 Return.” The same tax return filing requirements apply to all active employers, whether operating as a corporation, limited liability company, partnership or sole proprietorship.
Failure To Withhold And Pay Employment Taxes
The IRS considers the failure to properly withhold and pay these taxes a serious violation of the internal revenue code. If a business fails to pay its withholding and payroll tax obligations in a timely manner, the IRS is authorized to forcibly collect the tax due, plus substantial penalties and accrued interest.
The IRS employs revenue officers who specialize in the collection of these liabilities. These revenue officers aggressively pursue collection of unpaid payroll taxes from the business — and often from the company’s officers, directors, owners and other responsible individuals.
On the business level, if the revenue officer is unable to collect the delinquent payroll tax, the revenue officer will often seek to close the business and liquidate its assets. In certain cases, the IRS will criminally prosecute responsible individuals who willfully fail to file payroll tax returns or pay the payroll tax liabilities of an employer. The IRS employs specialized teams to achieve these results — you need someone to level the playing field.
Let Us Be Your Strong Advocates
Daniel Rosefelt & Associates will work tirelessly to keep your business operating and to solve your payroll tax liability. We will help you understand your payroll tax obligations, help you solve your existing problem, and help you meet your future payroll tax reporting and payment requirements so that you need never fear a call from the IRS again.