The short answer to that question is yes, criminal charges can be a possibility when it comes to payroll taxes. That is at least on the employer’s side because the employer automatically withholds money from an employee’s paycheck and has the responsibility to match certain payroll taxes. It is then their responsibility to pay that money to the IRS. The IRS takes the position that when the employer does not pay the payroll taxes, a fiduciary duty is created, which results in a breach of that duty. The ones who withheld the money can then be pursued in criminal court.
Can The IRS Take My Home If I Do Not Pay The Payroll Taxes I Owe?
The short answer is that yes, they can but only in certain circumstances. The individual is only responsible for the trust fund penalty taxes, so if the IRS goes that far to seize the home, it would be due to the trust fund penalty taxes, not the actual payroll taxes. If the company owns a building or property, that would be attacked first by the IRS procedure before trying to get an individual’s home. The IRS will do almost everything else they can to collect the money before starting a foreclosure procedure to seize a home.
My Small Business Is Having A Problem Keeping Up With Our Payroll Taxes Because Some Of My Customers Are Not Paying Me. I Am Scared To File My Payroll Tax Returns And Then Have The IRS Show Up And Close Me Down. Any Suggestions?
Yes, I do have some suggestions. The first one is to file those returns. You have to file a return, whether it is a payroll tax return, a corporate tax return, or your personal return. Those have to be filed before the IRS will work with you to resolve those taxes. There will be more problems if you do not file the returns. If you file them and cannot pay them, you should contact your representative or the IRS directly and talk to them about payment arrangement so that you can pay the taxes over time. The IRS generally will be happy to work with you as long as you are making an effort by filing the returns.
When Are Payroll Taxes Actually Due?
As an employer, there are actually multiple deadlines and also different options as to when to submit your payroll taxes. Based on the amount, payroll taxes can be submitted either three days after the end of the pay period or payroll taxes can be submitted monthly regardless of when the pay periods fall. Again, these are the amounts withheld out of the employees’ paychecks that has to be submitted within that either 3-day or monthly timeframe. Additionally, there are other reporting deadlines that employers also have to follow. When it comes to reporting and reconciling your payroll taxes, employers have to file a form 941 at the end of each quarter, which shows how much money was actually paid out to employees, how much money was withheld and what deposits were made.
This serves as a reconciliation so that if there are still any unpaid balance, then that balance can be paid at the end of the quarter or in the reverse, if there is a refunding for overpayment of a liability when you file that reconciliation, you can also possibly get a refund.
What Are Civil Penalties For Unpaid Payroll Taxes?
Civil Penalties, also known as Trust Fund Penalties, are actually an assessment on the individual level for unpaid payroll taxes. What this means is that the IRS can hold certain individuals within a company individually liable for these unpaid amounts. The IRS takes a viewpoint that there are certain individuals, whether they be the shareholders or outright owners of companies or certain chief officers that are responsible for making these payroll tax deposits. The IRS deems that these people are responsible, and the IRS can make a civil penalties or trust fund penalty assessment against these individuals and then begin to go after those people on an individual level for the amounts that are owed.
For more information on Failure To Pay Payroll Taxes, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.