Get Help with Your Payroll Tax Problems from a Professional IRS Lawyer
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If you’re like most employers who fall behind with their payroll deposits, the thought of dealing with payroll taxes probably makes your palms sweat. After all, it’s not just about calculating and paying the taxes; there are also forms to be filed and deadlines to be met. And if you make even a small mistake, you can face stiff penalties from the IRS.

There are many reasons for this, equipment failure/unforeseen circumstances, bad receivables, the timing of cash flows, and a general decrease in sales.

Fortunately, help is available. A qualified IRS lawyer can take care of all the details for you, ensuring that your taxes are filed on time and that you comply with all IRS (Internal Revenue Service) regulations.

So why not let a professional handle this important task?

At Seattle Legal Services, our experienced tax attorneys can help you with all aspects of payroll tax compliance.

Give us a call today to find out how we can help you!

What Is Payroll Tax?

Payroll tax is a type of tax that is imposed on employers to fund various social welfare programs. These taxes are typically deducted from an employee’s paycheck, and the employer is responsible for remitting them to the appropriate government agency.

The above definition of the payroll tax is quite general, but we are here to solve your problem in accordance with the IRS. According to IRS Form 941, payroll taxes refer to the Social Security and Medicare contributions taken out of an employee’s paycheck. This is a form that employers use to file quarterly returns reporting their payroll taxes.

Most Common Payroll Tax Problems People Face

Late Payroll Tax Deposits and Payments

If you fail to make your payroll tax payments and deposits on time, the IRS will impose fines and penalties on you. Most of them will charge 0.5% of the tax amount owing every month and a 25% penalty for late tax deposits. As a result, to avoid hefty fines and penalties, make sure that your monthly taxes are sent on or before the 15th day of the month after taxes have been withheld from employee paychecks.

Failure to Withhold and Pay Federal Taxes

In the United States, all business employers must legally withhold three taxes from employee wages or salaries: federal income tax, Social Security, and Medicare taxes. If an employer does not comply, the IRS will demand that the business owner pay these withheld taxes plus additional fines and penalties. If you do not pay your federal taxes to the IRS and then are not current, you may be charged with a crime and face jail time.

Failure to Issue IRS Form 1099

Another typical issue for firms that hire outside companies or subcontractors to work for their business is failing to issue the IRS with an IRS Form 1099. You must give an IRS Form 1099 to a third party if you pay them $600 or more in any calendar year. A penalty of $75 for each 1099 not issued takes place if you do not submit the IRS Form W-2 promptly, and you may be fined up to 31% of any payment made in federal taxes.

Reclassifying Employees as Independent Contractors

You may be tempted to classify some of your employees as independent contractors to save on payroll taxes. However, this is a risky move that can come back to bite you. The IRS has strict rules about who can be classified as an independent contractor, and if you misclassify an employee, you may be required to pay that worker’s back payroll taxes plus interest and penalties.

If you are facing any payroll tax problems, it is advisable to seek the help of a qualified IRS lawyer.

What Are the Penalties for Not Filing or Paying Payroll Taxes on Time?

If your business have unpaid payroll taxes or doesn’t file it on time, it accrues a failure-to-file penalty of five percent each month until the max late fee of 25 percent is reached. Even if you ignore the IRS’s written notifications and delinquency statements, it will figure out a way to get its money.

Here are some of the ways the IRS will try to collect from your business:

  • Garnish wages
  • A lien attached to your real property
  • Levy bank accounts
  • A lien attached to your business equipment

If you don’t file and pay, interest and penalties will keep adding up. You could even lose your business or go to jail in severe cases.

What to Do if You Have 941 Payroll Tax Problems

If you can solve the problem right now by filling out the form or making a deposit, and the IRS isn’t going to hit you with huge fines and penalties, do it. That’s the most effective way to resolve the problem.

However, if your payroll tax difficulties have grown severe, you should contact an expert tax attorney to represent you before the IRS. An Enrolled Agent has received specialized training and has the relevant expertise and experience to advocate for you at all levels of the IRS bureaucracy.

At Seattle Legal Services, we understand the ebbs and flow of business cash flows because we are small business owners ourselves too. We will fight to save your business and your livelihood from the IRS.

Business 941 Payroll tax cases can be some of the most complicated cases to resolve. You do not want to go it alone if you have payroll tax issues. The IRS takes Payroll Tax Cases very seriously and has its Revenue Officers pursue them aggressively. The Revenue Officers have one goal COLLECT NOW!

When you fail to pay the federal withheld tax to the government, the government will come after you for the money. Once for giving out refunds/credits to employees and again for not collecting the taxes from you, the employer. So, you can see why the government is not sympathetic in these cases.

When this situation arises, the IRS can and usually will look for responsible parties to assess the trust fund recovery penalty against people they deem a “Responsible Party.” The IRS does this so that they can collect against both the business and the person responsible for willfully neglecting to remit the payroll deposit. This means two payment plans so the government can recover its money faster.

To be deemed a responsible party, the IRS will see if a person acted Willfully and if a person had Financial Control over the business. They will consider if an employee/owner had the following responsibilities:

  • Determine the financial policy for the business.
  • Direct or authorized payments of bills/Creditors?
  • Prepare, review, sign, or authorize to transmit payroll tax returns.
  • Have knowledge that withheld taxes were not paid?
  • Authorize payroll?
  • Authorized the assignment of any EFTPS or electronic banking pins?
  • Passwords?
  • Could other individuals do any of the above?
  • Has signature authority on business bank accounts?

We have extensive experience defending against trust fund recovery assessments and the negative consequences associated with payroll tax problems. If you would like to put my years of experience to work for you, Call us today at 206-536-3152!

Inexperienced People Should Not handle Payroll Tax Cases.

Take the first step toward getting your payroll tax problems resolved – contact us today by completing our simple contact form to get started today.

Frequently Asked Questions on Payroll Tax Problem

Why are payroll taxes so high?

One of the reasons for the large payroll tax could be the Tax Cuts and Jobs Act, which lowered taxes generally. With individual income taxes now lower for most low- to middle-income Americans, payroll taxes have increased compared to overall income taxes.

How do I know if my employer is taking out enough taxes?

The Tax Withholding Estimator on IRS.gov can help most employees by determining whether or not they need to give their employer a new Form W-4. The results from the estimator can be used to fill out the form and properly adjust income tax withholding.

Does everyone have to pay payroll tax?

Yes, every employee must pay payroll taxes. This includes federal income tax, Social Security tax, and Medicare tax. Your employer will withhold these taxes from your paycheck and remit them to the appropriate agencies.