All about Business and Corporate Liabilities

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Corporations can have tax liabilities in two ways. First, the corporation may owe income taxes, however the second -- and much more common way for a business to have a liability -- is due to unpaid payroll taxes. These taxes add up quickly and the penalties are very stiff. Payroll tax liabilities are very serious, and the IRS moves speedily. In this situation, the IRS will first focus on whether they can liquidate the business and get paid quickly. Due to the complexities of business taxes and corporate tax liability, the possible liquidation of the business, and the personal liability ramifications, it is not advisable to attempt to handle business taxes on your own. Hiring a professional to help you determine the most effective strategies when working with the IRS to resolve the issue of unpaid payroll taxes is a much wiser and less stressful approach to dealing with the problem. Damage control and a skilled plan for a workable solution are imperative from the very beginning!

If your business has unpaid payroll taxes, the first step to take is to stop getting further behind. If the IRS can see that the business isn’t profitable enough to pay its current ongoing payroll tax obligations, they will move as quickly as they can to stop the debt from snowballing. The IRS Revenue Officer would much rather shut a business down than explain to superiors why they let the problem escalate.

A corporate payroll tax liability is more complicated than an individual tax liability and the strategies for arranging a solution are more complex. When dealing with a corporate tax liability there is a balance between doing what’s best for the business and protecting the owners and other responsible parties from personal liability. Even the way you write a check to pay for the debt has ramifications. Any questions asked by the IRS agent also have ramifications, as answers to these questions may result in potential exposure for personal liability and potential corporate liquidation.

We Offer Business Tax Help

At Advanced Tax Solutions, we are passionate about assisting individual business owners with their corporate payroll tax liability. We understand how stressful dealing with the IRS can be in these situations and we want to help relieve you of the burden of trying to handle such a stressful situation on your own. We’re very proud of our customer reviews on Google and  Yelp, and our A+ Better Business Bureau rating.

Finding Business Tax Help with Penalties

Advanced Tax Solutions has a wide variety of strategies to help you with corporate liabilities and payroll tax liability. It’s important to remember that you are responsible for all payroll tax collection, reporting, and payment tasks in the eyes of the IRS, even if you use an outside payroll service or bookkeeper. In this event, it is entirely possible that the IRS may assess penalties and interest on your account. The IRS publication called Publication 15: Employer's Tax Guide lists some possible penalties which include:

  • Failure to file Form 941 and similar forms: One to five days late = 2% penalty assessed, 6-15 days late = 5% penalty assessed, more than 16 days late or within 10 days of first notice from the IRS, 10% penalty assessed (maximum 15%). As you can see, the sooner you take care of the obligation, the less expensive it will be.
  • Trust Fund Recovery Penalty - "If income, social security, or Medicare taxes that must be withheld are not withheld or are not paid, you [as a responsible party] may be personally liable for the trust fund recovery penalty." This penalty equals 100% of the unpaid income, Medicare, and Social Security tax. In addition to any penalties assessed, interest accrues from the due date, as well. Keep in mind that all deposits are applied to the most recent tax liability, so it is vital to make all deposits in a timely manner.
  • Misclassifying employees as independent contractors instead of employees can also result in a hefty bill for unpaid taxes, plus penalties. • Failure to provide information returns to employees (Form W-2) and other payees (Form 1099-MISC) can also mean IRS penalties. The amount of these penalties depends on several factors, including the type of error (not filing versus not giving employees or others their earning statements), the size of your company, the date of the payment (the penalty increases the longer it is unpaid), and whether the payment was made at all. If the IRS finds "intentional disregard" the penalty will increase.

Schedule a Free Consultation

When you need someone you can trust for Business Tax Help, get in touch with our experienced team of tax professionals. Call us at our Denver office any time at 303-753-6040 to schedule a free consultation for the Corporate Tax Help you need. Our goal is to provide you with the Payroll Tax Help you’re looking for so that you can put your tax problems far behind you as quickly as possible and move forward. We keep our prices reasonable so that you have one less financial obligation to worry about. Dealing with the IRS can be very stressful and complicated. Contact us today, and let’s get started.

 

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