I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.

In case you’re unaware, you can be held personally accountable for taxes withheld from your employees’ paychecks, that you failed to subsequently, remit to the government. These funds are said to be “held in trust” by the employer, hence the term trust funds. The fact that you have a payroll service provider is irrelevant to the IRS, State, or locality.  None of the above are interested in the intricate details of your service arrangement, not even in the case where the service provider misappropriated the funds, and failed to notify you of the fact. The business, and any individual that has authority to make pertinent payroll decisions, can be held personally liable (even after the business has closed its doors for good) If you’re processing payroll, whether you’re using a payroll service provider or not, be sure to 1) Withhold and remit taxes as scheduled; 2) If you have decision making authority over payroll, especially check signing (and you’re not the owner), do your best to make sure tax amounts are remitted as close to the scheduled dates as possible; 3) Make sure all returns (941, 940, 944, etc.) are filed on time; 4) Keep backup copies of all returns filed from the start of payroll processing and withholding taxes (even the largest payroll providers like ADP and Paychex only store a few years’ worth of reports).

The IRS and State regulatory bodies view “trust funds” as a top priority.  While, on the one hand, these funds represent a large portion of the government’s revenues, the government also finds itself, in the position to issue tax refunds to employees that had tax amounts withheld and the government never received. Thus, serving as a double hit to already strained budgets. So, don’t be surprised if the Revenue Officer (RO) that is assigned to your case for non-compliance is more aggressive than you think appropriate.   ROs (and other regulatory authority representatives) are well aware that trust funds are the easiest loans for a business owner to receive, but they’re also the hardest to payback.  Over the past couple of years, the IRS has started to notify certain businesses (that have had employment tax issues in the past) of their upcoming remittance dates.  In an attempt to keep businesses compliant.  Even with all of the effort, there are many businesses that find themselves in a situation where they owe back payroll taxes. 

If you are one of the individuals referenced above, you don’t have to wait until one of the regulatory bodies or their agents contact you (or heaven bid the business closes down with unremitted trust funds). Feel free to contact us in regards to our Tax Representation/Consulting Services, and let us assist you in trying to get some resolution to this problem that will not just go away!