Many small businesses get in cash flow problems for all kinds of reasons. How they handle these problems, especially when payroll taxes are involved, usually determines if they stay in business or not.
The IRS takes an extremely strong position on payroll tax violations.
If the IRS detects pyramiding, they would rather close the business and sell off all the assets instead of trying to work out a deal with the business. Pyramiding is when a business owes past payroll taxes and continues to create new unpaid liabilities.
The worst thing about payroll taxes is that the IRS has the ability to collect business payroll taxes from anyone they believe was responsible for not paying the taxes. For example, the business owner or any check signer on the business bank account might be singled out for collection activity.
IRS will try everything to get these payroll taxes.
Usually a visit to your home or work is in order to start the collection procedures. Then all of the weapons in their arsenal can be used (Liens, Levies, or Seizure) until the taxpayer has agreed to some type of repayment.
Once the IRS determines that the business may not be able to pay the payroll taxes, they will turn their sights on the individuals they think are responsible.
. . . Look Out!
It is important to pay the payroll taxes you owe to the IRS as non-payment can negatively impact your life. Consult an experienced Enrolled Agent for assistance with working out a plan to resolve your payroll tax issues.
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Stephen Wallick started Stephen Wallick & Associates to provide tax and accounting services to Contractors, Real Estate Investors, and Realtors. Steve specializes in IRS Tax Resolution services and works with his clients to resolve cases under scrutiny by the IRS. As a tax professional and enrolled agent, Steve can save you money with IRS loopholes each year. With over 20 years going up against “The Man”, Steve is uniquely qualified to resolve even the toughest IRS cases.