Payroll Taxes Not Being paid On Time
All check signers on company bank accounts can be held responsible for payroll taxes!
If you are a check signer on the company checking account, it is your responsibility to make sure all Payroll taxes are being paid to the IRS at least monthly.
Sometimes businesses get behind on payroll taxes due to cash flow problems. The penalties and interest assessed by the IRS are excessive for this type of delinquency. This problem becomes worse with IRS penalties and interest, and the total amount owed can grow by 50% to 75% in a short period of time.
If the company is now in cash flow trouble and approaching the DANGER ZONE, it may never be able to pay off the total amount owed. Each check signer may be held personally responsible for the payroll taxes. And I mean each of the check signers listed on the bank signature card. This often includes spouses, secretaries, employees, relatives, office managers or yourself.
Before the company gets in the Danger Zone, you should get all non-essential check signers deleted from the bank signature card.
The IRS takes a very serious approach to collecting delinquent Payroll taxes and may levy or seize company assets in short order. The best advice I can give to you if you find yourself in this situation is, NOT to meet with the IRS Revenue Officer who calls or comes to the door to collect these taxes. Often, how you answer their first 5-10 questions will determine whether you stay in business and if you or others will become personally responsible for the payroll taxes. One of the most important services I offer my clients is to meet with the IRS myself. This allows my clients to concentrate on running their business and improving cash flow.
I have never had a good outcome where the client meets with the IRS Revenue Officer themselves.
*Ben E., a framing contractor, owed the IRS over a quarter of a million dollars in payroll taxes and personal income taxes. Ben had been behind before with payroll taxes, so the IRS wanted his company closed. I was able to have him declared uncollectible and used Tax Secret #3 to reduce penalties and interest. Ben saved $213,000.00