Payroll Tax Debt
Payroll tax debt is a serious issue. This type of debt occurs when a business either fails to withhold taxes from their employees’ wages or fails to pay them to the IRS in the appropriate time frame. The amount that an employer must pay the IRS from their employee is called a Trust Fund Tax. If the IRS notices this type of debt (called a Trust Fund Tax Liability), they will act swiftly and severely.
If you miss a payroll tax deposit, the IRS can and will immediately begin trying to collect their money. They will come after a business’ assets quickly and will not hesitate to go after the business owner’s personal assets if they cannot satisfy the tax debt from the business’ assets alone. Large penalties and interest will immediately begin accruing on the tax debt. These taxes will not go away even if the business is closed or has filed for bankruptcy.
This type of tax debt can also be considered a criminal action. If the IRS can prove that the missed payroll deposits were deliberate, rather than accidental, you could be criminally prosecuted.
If you have a payroll tax debt, it’s important to correct this issue immediately. Don’t let your debt and the penalties on it overwhelm you. You should consult with a tax professional like those at Vanguard Tax Relief as soon as possible. There are options for you to get out of debt and you should start utilizing them right away to avoid more penalties and interest. Options like Installment Agreements, an Offer In Compromise, Penalty Abatements, and Currently Not Collectable can help you get out of debt and avoid further action from the IRS. Contact Vanguard Tax Relief right away to get help finding the best solution for you and your business.