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IRS Business Delinquent Payroll Taxes Consequences

Delinquent_Payroll_Taxes_IRS

Being a small business owner is a liberating experience. But with the freedom, comes responsibility. It’s imperative to pay the IRS on time. You must make Business Payroll Taxes a priority. Many are not aware of it, but this can make or break your Small Business. It’s important to know the consequences of being Delinquent on Business Payroll Taxes so you don’t make a deadly mistake with your Business finances.

When you neglect to pay Business Payroll Taxes on time you will receive a warning from the IRS. If the issue is not resolved in a timely manner, there are several consequences that can become reality:

  • The IRS imposes a very harsh Penalty when Business Payroll Taxes are not paid. The penalty is 100% of the Taxes owed. This is called “Trust Fund Recovery.” Remember, when your Payroll Tax obligations are not met you are breaking a binding contract you have with the United States Government.
  • IRC Section 6672(a) states that the blame for not paying Business Payroll Taxes goes to “every responsible person” who willfully neglected to pay the payroll taxes. This means Accountants, Bookkeepers, and anyone with check signing ability can get the blame for the tax debt.
  • Even if there was no bad motive involved, the expensive “Trust Fund Recovery” penalty is imposed. For example, some Business owners fail to pay their Payroll Taxes out of desperation. They may have been trying to save the company from Bankruptcy or protect their employees. But the reasons why you are delinquent are irrelevant; penalties and debt will still be imposed.

According to the IRS’s official website thousands of taxpayers have outstanding Trust Fund Recovery penalties as a consequence of being delinquent on Business Payroll Taxes. The amount of money is in the billions and it is still growing. You do not want to be another number in this equation. Take care of your IRS Tax issues as soon as possible. Contact us for a free tax analysis with no obligation.

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