Avoid Personal Liability for Missing Payroll Taxes: Here's What You Should Know
By Taxation Solutions, Inc. on 2015-12-21
When your business is in serious need of income, it can be awfully tempting to use the funds collected for payroll taxes as an extra source of revenue. However, that money is not yours to spend. It belongs to the IRS, and tax officials can hold you personally responsible if your payroll taxes go unpaid.
Under the Trust Fund Recovery Penalty of the tax code, employers are obligated by law to collect payroll taxes and submit them to the IRS. These federal tax deposits are generally provided to the tax authorities around three days after payroll checks are distributed.
It won’t be long after these withholding payments go missing that the IRS will take action—not only against your company, but also against any principal party who “willfully” fails to collect or pay the government the money it’s owed. This could include business owners, directors, employees, or anyone else involved in the misappropriation of payroll taxes.
Once the IRS catches on to the situation, it could be only a matter of months before your business is drowning in payroll tax penalties and you’re on the line for a federal crime.
If you’re finding out the hard way that it doesn’t pay to cover operating expenses with money meant for payroll taxes, contact the tax professionals at Taxation Solutions, Inc. We serve the greater Charlotte area, and we specialize in payroll tax debt resolution for organizations of all sizes. We’ll get you out of trouble with the IRS and even help you avoid further payroll tax problems in the future. When it comes to business tax solutions, you can count on us!