Payroll taxes affect every business, small or large. If you own a business and you need help with payroll tax representation, don’t wait any longer! When a business owes back payroll taxes the Internal Revenue Service can shut the business down and attach the back taxes to you personally (known as a trust fund penalty). Call us today at 844-841-9857 or click the button below to fill out the form to schedule your free consultation!
There’s no need to feel embarrassed or ashamed if your business needs payroll tax representation. Tax law is confusing and difficult! Polston Tax has over 100 years of combined tax experience nationwide to help you with your taxes and accountants dedicated to keeping our business clients compliant on their payroll taxes.
Withheld payroll taxes are frequently referred to as “trust fund taxes” due to how the employer holds the employees’ money in a trust until a federal tax deposit is made. When your business fails to withhold the appropriate amount of taxes, you can be penalized regardless of the form of your business entity. If the amount of taxes you owe exceeds $100,000, the IRS may assign a Revenue Officer to your case.
For the trust fund recovery penalty to apply, your business must meet two conditions:
When you partner with Polston Tax, we’ll help you reach a reasonable agreement with your Internal Revenue Officer and get your delinquent taxes sorted out in the shortest time possible. We specialize in designing action plans for businesses no matter your budget or the complexity of your case.
All employers are required to withhold and match certain taxes from their employee’s paychecks or wages and are required to send them to the IRS. Payroll taxes are withheld on behalf of your employees and then remitted to local, state and federal authorities. Payroll taxes include the following:
Employers are also required to file certain payroll tax forms with the IRS, such as a Form 941, Employer’s Quarterly Federal Tax Return, and a Form 940, Employer’s Annual Federal Unemployment or FUTA Tax Return.
When employers fail to file these tax returns and pay money for the taxes due, the Internal Revenue Service won’t be shy about getting the money. If a business owes back payroll taxes, they will most likely have a local Revenue Officer assigned to investigate the business and the officers of the business, take an inventory of the business assets, complete a trust fund interview to determine personal responsibility attributed to officers, and make a determination if the assets of the business should be seized, or if the business should be shut down. Revenue Officers can take very aggressive tactics and often contact the customers of a business to issue notices of levy that the business owes taxes.
Payroll tax withholdings are calculated using two methods — wage bracket methods and percentage methods. The wage bracket method is the easiest way to calculate your payroll taxes.
The wage bracket method is calculated using IRS Publication 15-A in “Wage Bracket Percentage Method Tables.” These tables are set up in accordance with employee pay periods and then checked into a W-4 form. An employee’s status as single or married directly impacts the number of allowances they can claim.
After you’ve determined the gross wage for your pay period in columns A and B in the 15-A form, subtract the amount from Column C and multiply your results by the percentage in Column D. Employees can also request additional tax withheld from each paycheck. The final sum is the amount you should withhold from your employee’s paycheck for their pay period.
The percentage method is recommended for large businesses and is typically more complicated than the wage bracket method. To find the right tax withholdings using the percentage method, you must determine how much FICA (Social Security and Medicaid) tax is due.
FICA taxes are paid using 50% of your employee’s paycheck and 50% of your business’s own revenue. It is your duty as an employer to remit your employees’ FICA from their paychecks. FICA tax rates are currently at 12.4%, half of which is paid by the employer and half of which is paid by the employee. Medicare is similarly split with a 2.9% current rate that is halved between you and the employee.
Polston Tax is home to a large body of tax specialists who can approach your case from multiple angles to gain new insights and advantages. With staff members knowledgeable about everything from accounting to appeals, we can help you prepare your case and sleep easier at night knowing we have your back.
We have a deep and complex understanding of the IRS’s inner workings and know how to strike deals and compromises that will work for your business. Our team works directly with the IRS to craft a reasonable actionable plan, so you can receive the best result possible.
At Polston Tax, we’ve seen everything. With our wide range of services and our dedicated team, we have you covered in even the most complicated situations. Get back to business and take the weight off your shoulders with comprehensive tax services from Polston Tax.
If you shut your business down but still owe payroll taxes, there is still hope! There are always options. Let us help you today!
Payroll taxes are called “trust fund taxes” because the employer holds the money withheld from employees’ paychecks “in trust” temporarily until it’s deposited with the IRS. Think of it this way: when you withhold $500 from an employee’s paycheck for taxes, that $500 belongs to the employee and the government, not your business. You’re holding it in trust, which is why the IRS treats unpaid payroll taxes very seriously.
This is a serious mistake. Unlike other creditors, the IRS:
– Takes swift and aggressive action
– Assigns a Revenue Officer to investigate
– Can shut down your business immediately
– Can place personal liability on owners and officers
– Can levy against business assets and customer accounts
– Can pursue criminal charges for willful non-payment
Delaying payroll taxes is one of the most dangerous financial decisions a business can make.
“Willful failure” is defined as:
A conscious, voluntary, and intentional failure to pay taxes
Knowing you had the money but choosing to pay other creditors instead
Deliberately ignoring IRS notices and warnings
Recklessly disregarding your obligation to pay
Importantly, willful failure doesn’t require criminal intent—it just means you knew about the obligation and deliberately failed to meet it. This is much easier for the IRS to prove than criminal fraud.
Yes, absolutely. If you’re deemed a “responsible person” with willful failure, you can be held personally liable even if you’re:
– A manager or supervisor
– A bookkeeper or accountant
– A corporate officer
– A member of an LLC
Personal liability isn’t limited to owners—it applies to anyone with financial authority and the ability to pay.
Yes. The IRS has authority to:
– Close your business
– Seize business assets
– Levy against your bank accounts
– Garnish your personal wages
– Contact your customers and issue levies against money they owe you
– File a tax lien against all business and personal assets
This is why unpaid payroll taxes require immediate attention.
