Whether you reside in Hartford, Connecticut or elsewhere, if your business owes back payroll taxes to the IRS it is good advice to deal with the issue as soon as possible. How do you handle the back payroll taxes?
Get into tax compliance!
We always advise our clients that the first step for handling any tax problem with the IRS is to get into compliance, which means you file all of your payroll tax returns and begin making your current payroll tax deposits. Without current compliance there is no making a deal on the back taxes.
Is the Company worth saving?
If the company is worth saving then the next step will be to deal with the IRS Collection Division to resolve the company payroll tax debt. If the company is not worth saving than it is probably in your best interest to shut the company down and dissolve the entity.
If the entity is a Corporation or a multi-member limited liability company than the taxpayer will reduce their personal exposure to just the trust fund portion of the taxes, which is the portion of the payroll taxes withheld from the employees. Taxpayer's may be personally responsible for those taxes if the IRS determines they were a responsible person who failed to make the current payroll deposits.
A significant area of focus for my practice is in representing taxpayers being pursued by the IRS under IRC Section 6672, which is the Trust Fund Recovery Penalty because they were responsible individuals at a company that failed to make its payroll tax deposits.
For single-member limited liability companies, it will determine if the liability arose before or after January 1, 2009. If the payroll tax liability is for a period starting on or after January 1, 2009 then the member will be responsible for only the Trust Fund portion of the liability.
Dealing with the IRS Collection Division
If the company is worth saving then the taxpayer, or preferably his or her representative, will have to deal with the IRS Collection Division to try and work out a payment plan or collection alternative for the business. If the company is not worth saving, then the representative will deal with the IRS if and when they pursue the taxpayer for personal liability.
Whether you are in Hartford, Connecticut or elsewhere, if you have any questions about dealing with the IRS about a payroll tax liability or other tax issue, feel free to contact me at egreen@convicerpercy.com.
Eric L. Green, LL.M.
Convicer, Percy & Green, LLP
41 Hebron Avenue
Glastonbury, CT 06033
Ph. (860) 657-9040
Fax (860) 657-9039
www.convicerpercy.com
Comments(0)