One of the most common tax problems of a business is falling behind in payroll taxes. These payroll taxes consist of Federal income tax withholding from employee wages, Social Security withholding, and Medicare withholding taxes. These taxes are paid and reported on IRS form 941. There are also State withholding taxes and unemployment taxes that are imposed on businesses. Many States, like Michigan, also have some form of business tax, such as a corporate income tax.
Often times, the situation seems hopeless for the business owner who has accrued thousands of dollars of tax, interest, and penalties while working day and night to save his or her business. The IRS is very harsh when it comes to the failure of a business to pay taxes withheld from employees’ paychecks, even though the business owner thought that, at the time, there was no other choice but to defer the payment of these taxes. As far as the IRS is concerned, if a business cannot pay its withholding taxes, it should simply go out of business.
For many of these taxes, the IRS or States have imposed personal liability on the owners of the business, officers of the business, and/or any other responsible persons working for the business if the business does not pay the payroll or business tax. This area of tax law is one where it is very common for a business owner to pay quite a bit of money to the IRS toward back taxes only to find out later that the payment was applied toward interest or penalties, without having the effect of reducing the personal liability of the individual business owner.
This area of the law is constantly evolving, as both the IRS and the States do their best to “crack down” on the failure of businesses to keep current on payroll taxes. This is one area of the tax that is very difficult for a business owner to navigate his or herself.
Over the years, Joseph Falcone has guided hundreds of businesses through problems associated with delinquent payroll and business taxes. Taxpayers have found his advice to be valuable as they work to save their businesses in hard economic times. There is a way to solve payroll and business tax problems. This is your business. This is your life. Joseph Falcone can help you.