Let’s be honest. Most business owners don’t wake up in the morning, go to work and say, “I’m not paying my payroll taxes.”
A business owner was struggling to stay afloat and did not send the withholding taxes from his employees to the IRS. This has been going on for a few years and he wanted to know how much trouble would he be in.
Owing 941 payroll taxes is very different from owing personal income taxes. Not only can the IRS padlock the doors to your business, they can come after you personally, levy your bank accounts, confiscate your receivables and seize your property. Per the Trust Fund Recovery Penalty, any person that has the power to control the finances of the business could face penalties for willfully avoiding payment.
Scarier still is that it could turn into a criminal matter. Why?
It can turn into a criminal matter because the money has already been deducted from each employee’s payroll checks. It is not your money to begin with. Payroll tax delinquency is the IRS’s number one enforcement priority. The IRS will look at it as if you stole the money.
There are a number of legitimate issues that can prevent you from paying the IRS.
Let’s be honest. Most business owners don’t wake up in the morning, go to work and say, “I’m not paying my payroll taxes.” One week you might be short of cash. Maybe business is slow or a customer’s check bounces. There are a number of legitimate issues that can prevent you from paying the IRS.
You figure you’ll make it up the next week. But then next week comes and goes, and you realize you still don’t have enough money to make that payroll tax deposit. Eventually, the entire situation starts snowballing into an avalanche.
The smartest thing you can do to protect your business and family is to have someone represent you
Between paying your employees their regular paychecks and paying the IRS the necessary payroll taxes, it can be hard being a business owner these days. A lot of times when money is short, business owners pay the employees first. It’s natural to take care of your employees, even if you have to skip paying yourself.
Unfortunately, the IRS doesn’t care if you can’t pay your employees, or even if you have to put them out on the street. They don’t care if you can’t collect your receivables, or if your biggest customer just went belly-up. All they care about is this one simple fact: you have money that belongs to them.
The smartest thing you can do to protect your business and family is to have someone represent you—an expert who deals with the IRS for a living. Not only can they protect you from the IRS calling and showing up at your door, they may be able to get those penalties reduced. In some cases, they can have them completely removed.
You’ve worked hard to keep your business open. You don’t have to wait until the IRS has seized your accounts, closed your business and added on penalties to get the help you need. You have the right to be represented. Remember: “For every tax problem, there’s a solution”.
Constant W. Watson III, CPA, CTRS, is both a Certified Public Accountant and a Certified Tax Resolution Specialist. He is just one of a few, in the State of Illinois who is certified by The American Society of Tax Problem Solvers. He has over 30 years of income tax and accounting experience. For a Free Consultation, call (708) 206-9900 or visit www.watsonontaxes.com.