Employers are aware that owing the Internal Revenue Service or the State Payroll Tax Authorities creates a financial burden on their business.

 

If you are an employer and are not aware of the consequences for not filing Form 941 Employer’s Quarterly Federal Tax Returns, Form 940 Unemployment Tax Returns and W-3 Wage & Income Transmittal, W-2 Wage & Income Statements you are gambling your business away.

 

First thing to do when you owe payroll taxes and cannot pay the quarterly deposits is to look over your business expenses and start cutting/removing away those items that are not essential for the continuation of the business.

 

Then, immediately begin paying the next payroll tax deposit. DO NOT PAY THE LATE OR PAST DUE AMOUNTS FIRST. You must be in current compliance with all filing and paying requirements in order to negotiate payment arrangements with the Internal Revenue Service or State tax agencies.

 

Then, make sure your individual tax returns and tax debts are paid, you are current and or under an arrangement with the government agency to resolve your individual tax debts.

 

Yes, even if you own a Corporation, Partnership or other entity ownership. The government agency will seek and confirm cross compliance tax check on your business or business ownership entity.

 

There are several resolution options for payroll taxes depending on the cause of the delinquency. See below:

 

• Payment missing? Secure a copy of the federal tax deposit electronic data, copy of the check or other financial instrument utilized to pay. Make sure you make a front and back copy. Send a request for a Payment Tracer and designate which quarterly period the payment was intended to pay.

• Amended payroll tax return required? Go ahead and submit an amended payroll tax return to adjust the amounts correctly.

• Need an installment agreement? Again, make sure your business has filed all required tax returns even if you owe. Start making Federal Tax Deposits now for the current pay period, request an installment agreement on-line at www.irs.gov.

• Or, for those businesses that owe more than $25,000.00 in payroll taxes you must submit Form 9465 with Form 433B Collection Information Statement for Corporations, LLC, other entities except Sole proprietorship. Sole Proprietorships submit Form 433A which includes a B section.

The criteria to qualify for an IBTF-Express IA are:

• You owe $25,000 or less at the time the agreement is established. If you owe more than $25,000, you may pay down the liability before entering into the agreement in order to qualify.

• The debt must be full paid within 24-months or prior to the Collection Statute Expiration Date (CSED), whichever is earlier.

• You must enroll in a Direct Debit installment agreement (DDIA) if the amount you owe is between $10,000 and $25,000.

• You must be compliant with all filing and payment requirements.

To apply:

• Apply online if you owe $25,000 or less in payroll taxes;

• Call the IRS Business and Specialty Tax assistance line 800-829-4933;

• Call the number on your bill or notice.

Businesses that do not qualify for an IBTF-Express IA should prepare Form 433-B, CIS for Businesses, and contact the IRS immediately. Call 800-829-4933 or the Field Collection Revenue Officer assigned to your case.

• If you are current with federal tax deposits or become current and cannot pay within one year. Then, request a hardship for one year by writing a request to the Service Center where you received notice of balance due. Include the appropriate financial statements and back-up documentation depending on the type of entity as indicated above for installment agreements. The IRS can approve a hardship request if you and your business qualifies.

NOTE: If you individually or as an Officer (owner) partner can borrow or loan the business money to pay. Make sure that you designate the money first to Trust Fund Only if the money will not fully satisfy the debt.

 

In this manner, the IRS cannot pursue individual assessments against those who failed to pay the payroll taxes. (Again, just for Officers and others. Not sole proprietors). Sole proprietors are solely responsible for all payroll debts of a business.

 

For those officers, non-profit financial directors, and others who are responsible for paying payroll taxes for an entity and who pay other debts in lieu of paying payroll taxes. Read Internal Revenue Code 6672 for the individual responsible willfulness criteria on assessments against those who fail to pay these types of taxes.

 

Other options for payroll tax debts exists. Contact a Payroll Tax Resolution Expert, CPA, Enrolled Agent or Tax Attorney who has expertise in this area.

 

For more information or resources go to www.advocatetaxgroup.com or call Martha De la chaussee at (323) 344-2294 for free 30-minute initial consultation. NATIONWIDE Service available.