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Employment and Business Tax

Business Tax Services: Payroll Taxes to Payment Plans

Thorough tax preparation is the cornerstone of a thriving business. Alana Tax Group helps your company create a dependable foundation that sets you up for success. Work with us for all your business tax needs—from withholding payroll taxes to settling your debt through a payment plan. No matter your location, or your business tax needs, our San Fernando Valley office has you covered.

What are Payroll Taxes?

Payroll taxes are income taxes withheld from an employee’s income, including Social Security and Medicare taxes. All employers are legally required to withhold payroll taxes from the paychecks of their employees and place these taxes within a trust to be paid to the IRS.

How did I accrue payroll tax debt?

When employers, knowingly or unknowingly, fail to withhold payroll taxes, or fail to have the money within a trust to send to the IRS, they acquire a payroll tax debt. Payroll tax is considered a trust tax where it is the responsibility of employers to pay taxes out of a trust on behalf of their employees. The “trust” comes in where the employee’s federal tax withholdings and the employee’s portion of FICA are withheld and placed in trust to be delivered to the IRS in the form of Federal Tax Deposits. Therefore, failure to pay payroll tax is considered serious, and the IRS is particularly aggressive when it comes to collecting on delinquent payroll taxes.

What collections measures can the IRS take to collect payroll taxes?

The IRS may place a lien or a levy on the company so that the any money made off the sale of the business is put towards the debt. The IRS may also auction off the assets of the business until the debt is satisfied. If a payroll tax debt is ignored by a business, it can lead to the shutting down of the business, and in worst cases, imprisonment of the guilty. Even in cases of bankruptcy, some payroll taxes are not forgiven.

In certain circumstances, the IRS can pursue company owners, officers, and specific employees if necessary to satisfy the delinquent taxes, as well as assess civil penalties to parties involved with the businesses finances.

To avoid IRS collection actions and penalties, businesses should make their required federal tax deposits on time, every time.

What should I do if I currently own or have owned a business with employees, and owe 941 or Employee Withholding Tax?

We can’t stress enough that you NEED TO RESOLVE YOUR TAX ISSUE IMMEDIATELY! The IRS is most aggressive when it comes to these types of taxes.

If Payroll Taxes are not paid, you are putting your income, assets, and business reputation at risk. If these taxes (Payroll Tax 940/941) are neglected long enough, the business may be forced to close and all assets can be seized to satisfy the debt. Regardless if the business is closed, you must make arrangements to pay the taxes. The IRS will not be deterred—by not paying or planning, your personal finances are at risk.

If you owe back taxes and are unable to repay them in full, we can help you work with the IRS to create a business payment plan. There are a number of different options depending on your specific circumstances and amount owed. One of our tax consultants who specialize in payroll tax issues can discuss what options are available and what will be the best course of action. Contact us today to learn more.

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