Internal Revenue Service payroll tax audits and debts can cause financial turmoil on a business with employees. Knowing what causes payroll tax debts and audits, how to address cause of tax problem, compliance requirements and determining the best solution to the audit or debt leads to preventing IRS Collection Actions that can cost thousands if not hundreds of thousands of dollars in tax representation fees. Knowing who to hire when a business owner, officer needs professional help is also covered in this book. Not all tax professionals know or want to represent employers with payroll audits or payroll tax debts. The reason is that IRS Payroll Tax Audit and Debt resolution has over twenty six different processes and procedures. It is a grey area that covers administrative procedures, tax law according to the Internal Revenue Code, Treasury Regulations, Tax Court case decisions, Bankruptcy law, Criminal and fraud case issues and many other factors that can affect the manner in which a tax professional training, knowledge and expertise is utilized to secure the best resolution options for the client. Tax Attorney, Certified Public Account and Enrolled Agents are the only three types of tax professionals that can represent clients with IRS Collection problems. Do not get fooled by tax relief companies that promise a Fresh Start, Offers in Compromise and penalty abatement solutions. Not all cases fall into these potential resolution options. Bankruptcy is not a solution for payroll tax debts are not discharged. You can file bankruptcy which is in the majority of cases very costly. Bankruptcy Attorneys’ in Los Angeles are known to charge more than Forty-Thousand dollars to file bankruptcy for a business. That is the starting retainer amount. The IRS Collection Officer is known as the business terminator for they will take enforcement action if and when businesses do not follow directions and provide solutions to payroll tax debts. Liens are recorded, levies (garnishments) issued to known accounts receivable, financial institutions, third party holders of funds for the tax debtor. Furthermore, the Revenue Officer can take seizure action and shut down a business for accumulating payroll taxes. Sale of business assets and at times personal assets with equity will also be enforced. Then, there is the issue of what is known as the Trust Fund Recovery Penalty. The payroll tax withholding amount unpaid for each quarterly tax period is calculated and added to the employee share of Social Security tax withholding and Medicare tax taken from their pay. Then, the person at the employer who individually was responsible for paying payroll taxes for the entity (employer) and who willfully fails to pay can be billed individually for the unpaid payroll taxes. There is a whole process that is worked simultaneously by the Revenue Officer by interviews, securing business records, financial records and personal financial statements to determine the collection potential of the payroll tax debt from personal assets of the non-paying individual or entity. Read Internal Revenue Code 6672. This in itself will cost the employer and those persons who failed to make sure the taxes were paid over to the U.S. Treasury. Stories of businesses that had payroll tax problems when the Author of this book was a Revenue Officer are provided as examples for the business owners, officers, directors and members of businesses. Avoid the accumulating payroll tax debts at all costs. Even if your company hires a payroll service provider company or individual. You are ultimately responsible for verifying that payroll taxes are filed and paid according to the federal tax deposit rules and regulations. Avoid the high penalties for failure to file, failure to pay, failure to deposit, interest and many other consequences that will affect your business financially. Criminal prosecution and injunctions may also affect your business and personal finances.
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