As an employer, you distribute payroll checks after itemizing and withholding the deductions for taxes, Social Security, and insurance for each employee. If you are a startup or experiencing growing pains, you might believe your immediate need for a cash infusion will get your business over a dry spell if you redirect the payroll taxes you withhold for the Internal Revenue Service (IRS) with a plan to pay it back in the near future.
Failure to follow IRS protocols can lead to civil and criminal penalties. Our tax controversy attorneys understand your predicament, and we are skilled at negotiating acceptable resolutions that prevent the trust fund recovery penalty, or further further penalties. If this sounds like your situation, you will need some assistance negotiating terms to pay for failure to withhold payroll taxes in Phoenix.
What Can Happen When a Business Owner Fails to Remit Payroll Taxes?
The IRS has strict rules for collecting and submitting payroll taxes, and they are set out in United States Code § 7202. The Code specifies that employers must collect and be accountable for paying the taxes imposed by the IRS. Willfully failing to do so can result in a felony charge that, if convicted, will land you in prison for up to five years and you could be subject to a $10,000 fine. You must also inform your employees about the amount of taxes being withheld, and failing to alert them comes with a penalty of up to a year in jail and a possible fine of $1,000.
The IRS is usually willing to come to an agreement about how a Phoenix employer will make up for this failure to withhold and remit payroll taxes. With the help of our knowledgeable attorneys, you could resolve this issue without significant penalties.
The IRS Will Negotiate for Unpaid Payroll Taxes
Instead of imagining the worst, such as personal liability and jail time for failing to remit payroll taxes, our attorneys take a proactive stance to resolve the problem as quickly and efficiently as possible.
Traditionally, the IRS has not relied heavily on criminal charges, because IRS attorneys have the burden of proof that you willfully and intentionally withheld taxes. They are sympathetic to negotiating a resolution and will begin by sending you a letter demanding immediate payment. Our attorneys can help you issue a response to avoid liens, wage garnishments, seizure of your real and personal property, and bank account levies. Some actions we can help you take include:
- Requesting to pay in installments
- Requesting an extension or abatement
- Reviewing and taking advantage of tax deferment options
- Negotiate for an offer-in-compromise, whereby the IRS accepts less than you owe
Our phoenix lawyers will thoroughly investigate your failure to remit payroll taxes in Phoenix. We will then come up with the strategy that best accomplishes your goals and serves your need to pay the taxes while successfully managing your business.
Call a Phoenix Attorney if Your Business Failed to Withhold Payroll Taxes for the IRS
Running your business is challenging and you are potentially overwhelmed with the tax forms you must fill out. The IRS will send a letter if it finds out you did not remit your trust fund taxes from both employer and employees.
Remember, the IRS is tasked with proving you acted willingly when you fail to remit payroll taxes. If you are unable to pay at this time, your situation could act as a defense because you did not remit a payment your bank could not have covered. Additionally, there are several negotiated resolutions we can discuss with the IRS on your behalf, no matter where you are in Arizona. Failure to withhold payroll taxes in Phoenix can be a serious offense, but with our attorneys advocating for you, there are legal options available. Call us today.
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