Payroll taxes refer to taxes withheld from employee paychecks by employers on behalf of the government, such as Social Security and Medicare taxes, along with federal income tax withholding. Employers are required to deposit these funds with the IRS on a regular basis.
Employers who fail to deposit payroll taxes, or who deposit less than the full amount owed, may become subject to IRS payroll tax debt. This debt can accumulate rapidly as penalties and interest are applied to any unpaid amounts.
The IRS has the power to collect payroll tax debt by placing a lien on an employer’s assets, seizing property, or garnishing wages. They may also assess personal liability against officers, directors, and other responsible parties in order to collect this amount.
Employers facing payroll tax debt must take immediate action to address the matter. The IRS offers several solutions for settling payroll tax debt, such as installment agreements, offers in compromise, and penalty abatement.
It is essential that your business abides by payroll tax regulations going forward in order to avoid accruing additional tax debt. This includes making sure payroll taxes are withheld and deposited promptly, as well as filing accurate tax returns.
Consulting with a tax professional or attorney knowledgeable in IRS payroll tax debt can be beneficial in understanding your options and creating an action plan for resolving the debt.
This article was written by Alla Tenina. Alla is a top personal injury lawyer in Orange County CA, and the founder of Tenina Law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.