Past due payroll taxes are a thorn in the side of almost every small business owner, whether that business owner actually owes payroll taxes or is facing the possibility of owing for whatever reason. There are some triggers that can catch the attention of the IRS, and knowing these triggers can keep you and your business out of serious trouble. But in case you’re not convinced of the seriousness of the problem, here are 7 things to keep in mind.

1. Small Businesses are Under Scrutiny. Simply owning a small business puts you under additional scrutiny by the IRS because the IRS has identified small business owners as the biggest source of unpaid taxes. This is especially true during economic downturns.

2. You Can Lose Your Business. The IRS has an unbelievable amount of power when it comes to delinquent taxpayers. They can, in fact, shut your business down, complete with padlocks and chains on your front doors. And they don’t even need a court order to do it. If your customers owe you any money, the IRS can even place levies on those customers. Payroll taxes are no joke.

3. Penalties Accumulate Quickly and Spiral Out of Control. As if your total payroll tax bill isn’t enough, the IRS also assesses huge penalties, and those penalties plus payrolls taxes can bankrupt you unbelievably quickly. The IRS can assess three major penalties to you and your business. Those penalties are failure to pay, failure to file, and failure to deposit, and they can add up more quickly than you could even imagine.

4. It’s a Crime. If the IRS can prove that you intentionally chose not to pay payroll taxes, your case can be referred to the Criminal Investigation Division and eventually to the Department of Justice.

5. It’s Against the Law to Borrow from Your Payroll Taxes. It’s an unfortunate fact that many small businesses pay their operating expenses using money from payroll taxes. But this money doesn’t actually belong to the business, it belongs to the government. As a general rule, a business must make a tax deposit to the federal government three days after the date posted on payroll checks.

6. They Can Come After You as an Individual. Not only can the IRS pursue unpaid payroll taxes by going after your business, but they can also go after you own personal assets. This is legally called the Trust Fund Recovery Penalty and it can be very frightening for both business owners and shareholders.

7. What Next? If you are a small business owner who owes payroll taxes, you need to find professional help immediately. Although you may be tempted to represent yourself, that is one of the worst decisions you can make if you find yourself in this position. Unless you’re a former IRS agent, you are in no position to take on the IRS by yourself. They are ruthless and looking to get whatever they can from you. They’re not there to be your friend. They’re there to get money.

If you’re a small business owner, you should already be retaining the services of a tax attorney to help you sort out your financial situation. If you aren’t using a tax attorney, make sure to hire one before you actually need one. There are steps you can take to keep yourself out of the eye of the IRS, and a tax attorney can show you those steps before a problem even comes about. And if you find yourself the subject of an audit, find a competent tax attorney immediately and let him or her sort out your situation. Tax attorneys are experienced in negotiations with the IRS and can get better results than you ever could if you chose to represent yourself. You should be much more aware of the gravity of delinquent payroll taxes after reading the above article, so do yourself and your business a favor and hire a qualified tax attorney as quickly as possible.

Author Bio: Seomul evans is a SEO consultant for Tax Attorneys Texas and Tax Attorney Dallas

Category: Legal
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