Resolve Payroll Tax Problems & Protect Your Business
Unpaid payroll taxes threatening your business? Our tax attorneys resolve payroll tax problems and protect business owners from personal liability. The IRS takes payroll taxes seriously - they can shut down your business and hold you personally liable.
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Resolve Payroll Tax Problems & Protect Your Business
Unpaid payroll taxes can shut down your business and lead to personal liability. Our tax attorneys specialize in resolving payroll tax problems and protecting business owners.
What Are Payroll Tax Problems?
Payroll tax problems occur when a business fails to withhold, report, or pay employment taxes to the IRS. These taxes include federal income tax withholding, Social Security, and Medicare taxes (FICA). The IRS takes payroll tax issues extremely seriously because these are "trust fund" taxes—money withheld from employees that belongs to the government. Failure to pay can result in severe penalties, business closure, and personal liability for business owners.
Why Payroll Taxes Are So Serious
Unlike other tax debts, unpaid payroll taxes can result in personal liability for business owners, officers, and anyone responsible for paying the taxes. The IRS can hold you personally responsible through the Trust Fund Recovery Penalty (TFRP), which means they can come after your personal assets even if your business is a corporation or LLC.
The IRS can also shut down your business, seize business assets, and pursue criminal charges in severe cases. Payroll tax problems require immediate professional help.
Common Payroll Tax Problems
Failure to Deposit Payroll Taxes
Businesses must deposit withheld payroll taxes on a regular schedule (monthly or semi-weekly). Missing deposits results in penalties that can quickly add up to thousands of dollars.
Failure to File Form 941
Employers must file Form 941 (Employer's Quarterly Federal Tax Return) every quarter. Failure to file results in penalties and triggers IRS enforcement actions.
Using Payroll Taxes for Business Expenses
Some businesses use withheld payroll taxes to cover operating expenses during cash flow problems. This is illegal and can result in criminal charges. The IRS views this as theft of government funds.
Trust Fund Recovery Penalty (TFRP)
The IRS can assess the TFRP against individuals responsible for paying payroll taxes. This penalty equals 100% of the unpaid trust fund taxes and makes you personally liable, even if your business is incorporated.
Accumulated Payroll Tax Debt
Years of unpaid payroll taxes can accumulate into massive debt with penalties and interest. The longer you wait, the worse it gets, and the IRS becomes more aggressive in collection efforts.
How Our Tax Attorneys Resolve Payroll Tax Problems
Payroll tax problems require specialized expertise. Our experienced tax lawyers understand the complexities of employment tax law and know how to negotiate with the IRS to protect your business and personal assets:
Installment Agreement
We negotiate an affordable monthly payment plan with the IRS to pay off your payroll tax debt over time. This allows you to keep your business running while resolving the debt.
Offer in Compromise
In some cases, we can negotiate to settle your payroll tax debt for less than you owe. This requires proving that paying the full amount would create financial hardship.
Currently Not Collectible Status
If your business is struggling financially, we can prove that paying the IRS would cause hardship, temporarily halting collection activities while you get back on your feet.
Challenge Trust Fund Recovery Penalty
If the IRS has assessed the TFRP against you personally, we can challenge it by proving you were not a responsible person or did not willfully fail to pay the taxes.
Penalty Abatement
We can request penalty abatement based on reasonable cause, first-time penalty abatement, or other relief provisions. This can significantly reduce your total debt.
Prevent Business Closure
We work quickly to negotiate with the IRS and prevent them from shutting down your business or seizing business assets. Time is critical in payroll tax cases.
Protect Your Business and Personal Assets
Payroll tax problems won't go away on their own—they only get worse. The IRS will pursue aggressive collection actions including business closure, asset seizure, and personal liability. Our tax attorneys have helped hundreds of business owners resolve payroll tax problems and protect their livelihoods. Don't wait—contact us today for a free consultation.
Get Your Free Consultation NowWhat to Do If You Have Payroll Tax Problems
✓ DO: Contact a Tax Attorney Immediately
Payroll tax problems require specialized expertise. A tax attorney can help you navigate the complex rules and negotiate with the IRS to protect your business and personal assets.
✓ DO: Stay Current on Future Payroll Taxes
While resolving past payroll tax debt, you must stay current on all future payroll tax deposits and filings. The IRS will not negotiate if you continue to fall behind.
✗ DON'T: Ignore IRS Notices
Ignoring payroll tax problems will not make them go away. The IRS will pursue aggressive collection actions including business closure, asset seizure, and criminal prosecution in severe cases.
✗ DON'T: Use Payroll Taxes for Business Expenses
Never use withheld payroll taxes to cover business expenses. This is illegal and can result in criminal charges. If you're having cash flow problems, contact a tax attorney immediately.
Frequently Asked Questions About Payroll Tax Problems
What is the Trust Fund Recovery Penalty (TFRP)?
The TFRP is a penalty equal to 100% of the unpaid trust fund taxes (the employee portion of payroll taxes). The IRS can assess this penalty against any person responsible for collecting, accounting for, or paying over these taxes. This includes business owners, officers, bookkeepers, and anyone with authority over the company's finances. The TFRP makes you personally liable, even if your business is incorporated.
Can the IRS shut down my business for unpaid payroll taxes?
Yes, the IRS can shut down your business for unpaid payroll taxes. They can seize business assets, padlock your doors, and force you to cease operations. The IRS takes payroll tax problems very seriously because these are trust fund taxes. Our tax attorneys can help you negotiate with the IRS to keep your business running while resolving the debt.
Can I go to jail for unpaid payroll taxes?
In severe cases, yes. Willfully failing to pay payroll taxes or using payroll taxes for other purposes can result in criminal charges. However, criminal prosecution is rare and typically reserved for cases involving fraud or intentional evasion. Most payroll tax problems can be resolved through civil remedies like payment plans or settlements. Our tax attorneys can help you avoid criminal liability.
How long do I have to resolve payroll tax problems?
You should act immediately. The longer you wait, the more penalties and interest accumulate, and the more aggressive the IRS becomes. If you've received IRS notices about unpaid payroll taxes, you may have only days or weeks before the IRS takes enforcement action. Contact a tax attorney as soon as possible to protect your business and personal assets.
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