Many employers – no matter how big or small – contend with payroll tax issues at one time or another. Often, a small and unintentional mistake can lead to problems with the Internal Revenue Service (IRS) or state tax comptroller. In other cases, a major error in the accounting system may be the culprit. Regardless of the root cause, when the IRS or state tax office sends a notice by mail, or the tax man comes knocking in person, it is essential to act fast. Harold “Hap” May Attorneys at Law are here to protect your rights and help you resolve the matter quickly.
How Do Payroll Tax Issues Happen?
Employment tax errors can occur at any of the three main stages of determining payroll taxes:
1. While identifying taxable workers
2. While calculating taxable wages
3. While calculating withholdings
The rules are complicated and confusing. Lines can be blurry. Mistakes happen.
Then there is the issue of keeping up with filing and payment deadlines, who to pay and when. It happens all too often that a state or federal tax deadline was missed unintentionally.
Sometimes, a business owner may delay payroll tax payments to preserve cash flow for a struggling company, with every intention of getting caught up soon. Still, employment tax payments suddenly have to take a backseat to keeping the lights on. Non-payment of payroll taxes even once, however, can start a vicious cycle of increasingly unmanageable business tax debt and result in a far more serious legal predicament – one many businesses find difficult to overcome on their own.
Employment tax collection is one of the top priorities on the federal and state level, and therefore a serious matter. Revenue officers are assigned to past due cases and aggressively pursue payment. Our accredited tax attorneys recognize the gravity of payroll tax investigations and are ready to help.
How Does The IRS Deal With Payroll Tax Issues?
The IRS’ tool box includes a variety of punishments it can impose on businesses for the failure to pay employment tax. In addition to a demand for payment of the original payroll tax amount owed, possible punitive measures include the assessment of penalties, interest accruals and – in severe cases – levies, seizures of business assets and more.
Important points to remember:
- The IRS can hold the business owner or other responsible party liable for payment
- Payroll taxes cannot be discharged in bankruptcy proceedings
- Enforcement action may be taken without prior notice
- The IRS can “pierce the corporate veil” for payroll taxes to hold LLC holders as well as corporate shareholders responsible
Why a Quick Resolution is Important
Although it may take the IRS months or even years to notice a company’s payroll tax issues, penalties and interest accrue nonetheless, accumulating before the first notice is even sent. Preventing further penalty and interest accrual is key, and it is therefore imperative to contact a knowledgeable tax attorney as soon as the business becomes aware that an investigation is underway.
How We Can Help
As the IRS approaches payroll tax issues in multiple tiers, Harold “Hap” May Attorneys at Law is prepared to mount a multi-tiered defense to protect business entities and individuals.
This defense includes vigorous attempts to
(1) mitigate the initial employment tax amount due
(2) prevent a secondary investigation of business practices and decision makers, and
(3) minimize the collection and impact of penalties and interest
As experienced Houston payroll tax attorneys and licensed accounting professionals, our team members have in-depth understanding of IRS payroll tax collection processes and the ability to anticipate the revenue officer’s next move. We minimize the fall-out of employment tax investigations and help the business maintain operations by negotiating solutions with the IRS on your behalf.