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Understanding Payroll Tax Issues

Last updated on January 27, 2023

As a tax attorney and small business owner myself, I understand your payroll tax issues and cash flow challenges. You experience the loss of a key customer. You have unanticipated equipment repair or replacement expenses. We are experiencing a poor economy. A new competitor popped up just down the street from you.

How can you control all these outside variables? You have confidence in your ability to make your business a success, but you just need to get through a tough patch. Some small businesses with cash flow issues choose to delay payroll tax payments and related tax filings to keep their businesses afloat.

In reality, what you have done is take out an unauthorized loan from the US taxpayers to fund your business operations. You hope something will change so you can repay your payroll tax obligations before the IRS comes calling. However, this is not a good business practice.

Failure to file the proper payroll tax returns or properly deposit payroll taxes is considered a serious violation by the IRS, and enforcement efforts have steadily increased over the past several years. Because businesses generally create positive cash flows, they are fruitful sources of assets that the IRS can go after.

It is important to recognize that liability for payroll taxes can become more than a business liability that stays with your business. You may also find yourself personally responsible to pay delinquent payroll taxes. It is important to keep in mind that regardless of the age of the tax liability, you will not be able to discharge the debt by filing bankruptcy.

Payroll Tax Debt Is A Serious Issue

The IRS prioritizes collecting past-due payroll tax. Unpaid payroll tax debt can result in liens and levies against your business until the amount you owe is collected.

The good news is that many businesses are able to negotiate payment plans for addressing their past-due payroll taxes, rather than ignoring or prolonging the process. Payment plans can be structured for repayment of delinquent taxes while maintaining enough funds for operations as well as staying current for upcoming payroll taxes.

Don’t Delay! Act Today!

If you have a tax problem and would like to schedule a complimentary phone consultation with one of our tax professionals, please complete and submit our complimentary case evaluation form. After reviewing your information and evaluating your case, we will contact you to schedule a complimentary phone consultation with one of our experienced tax professionals.​

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