What are payroll taxes?
Payroll taxes are required to be withheld from W-2 employees’ wages and remitted to the government by the employer on a regular basis.
Employer Payroll Tax Problems
When the employer fails to file employment tax returns and deposit payroll taxes, which is called ‘941 taxes’ and ‘940 taxes’ in the federal context and ‘withholding taxes’ in Maryland, the law allows the US government to assess part of those taxes against the employer personally if certain conditions are met.
The IRS usually begins the payroll tax assessment process by first notifying the individual taxpayer that he or she has been identified as a ‘responsible person’ for payment of payroll taxes. If the taxpayer doesn’t contest the IRS’s findings within 60 days, the tax assessment becomes final.
Trust Fund Recovery Penalty
Many business owners aren’t aware of the fact that unpaid taxes which were once the responsibility of the business can be assessed against them personally as trust fund recovery penalty by the IRS or withholding taxes by Maryland Comptroller. Virginia tax authorities similarly assess unpaid employment and payroll taxes of the business against the individual business owner, or against the ‘responsible person’ within the business, as ‘converted taxes’. Trust fund taxes can be assessed even if the business has stopped operating years ago and ceased all operations.
Delinquent Employment Tax
Depending on the number of employees and the unpaid payroll tax amount, the delinquent employment tax assessed against the business owner or any ‘responsible person’ within the business, can be a crushing financial burden on the individual taxpayer subject to trust fund recovery penalty.
Contact Mehdyoun Tax Law Firm
Have you been contacted by the IRS or a state tax authority regarding unpaid 941 taxes, employment taxes or payroll taxes?
Contact Mehdiyoun Tax Law Firm immediately. Kamyar Mehdiyoun is a graduate of Georgetown Law School and has over 20 years of experience assisting businesses and business owners in employment and payroll tax issues.
Contact us right away for your FREE consultation with our IRS tax attorney. We’re here to provide you with the best payroll tax help available anywhere in the Washington, DC metro area.