Employment Tax Challenges

Employment Tax Challenges

If your business is being audited by the IRS or a state tax agency, then the earlier you involve an employment tax attorney, the better your chances are of resolving the situation agreeably. 

Sodowsky Law Firm, PC helps business settle their tax issues and avoid further problems.

Payroll Taxes

The Internal Revenue Code requires an employer to collect, account for, and pay over withholding taxes or trust fund taxes. How often the employer must make the tax deposits depends on the frequency of paydays and the dollar amount of payroll in the prior year. An employer must also file a quarterly federal tax return parentheses (a 941 Return) and the federal unemployment tax return (a 940 Return). The requirements apply to all active employers regardless of how their business is organized. The same rules that apply to corporations also apply to sole proprietors. Failure to pay these taxes is a violation of federal and state laws. The IRS will use any legal means at its disposal to recover past-due taxes, assesses substantial penalties, and add significant compound interest on the unpaid balance. 

When a business is operating in the red, some business operators begin to neglect the payroll taxes. They use the funds to pay operating expenses, such as rent and utilities, rather than paying the money to the IRS or the state. Our attorneys can help develop strategies to get you out of this quagmire and possibly prevent your business from closing. The business may be eligible for an offer in compromise. The IRS may agree to let you pay the debt in installments.

Trust Fund Recovery Penalty

The Internal Revenue Code mandates that all employers withhold Social Security, Medicare, and income taxes from their employees’ wages. These are collectively known as “withholding taxes” or “trust fund taxes.”  These taxes should be held in trust by the employer until they are paid to the IRS.

 The IRS can convert unpaid trust fund taxes into the personal liability of anyone with decision-making authority, no matter how limited over the bill payment process. Our attorneys can defend persons who face personal liability for business taxes.

Employment Tax Attorney Defense Strategies

Tax issues for businesses can end up destroying the business while leaving many of the main stakeholders holding the bill. A skilled employment tax attorney can help you have a strong defense against the charges, limit your liability, and protect your business. 

Solutions for your individual payroll tax issues may include: 

  • Submitting an Offer in Compromise to reduce your debt or manage arrearages with monthly payments;
  • Obtaining a short-term deferral while your business gets back on its feet;
  • Negotiating an installment agreement that allows you to pay arrearages over an extended period of time;
  • Reviewing your accounts to ensure that the IRS did not make an accounting error when assessing your tax burden;
  • Determining whether or not the tax debt is expired or about to expire;
  • Negotiating lien releases so that you can obtain loans to pay off taxes;
  • Getting the IRS to declare your debt uncollectible;
  • Make partial payments that reduce penalties;
  • Getting releases from tax levies; and,
  • Filing for abatement of interest and penalties.

Filing for bankruptcy will not solve your trust fund tax problems. Even if your business is liquidated in Chapter 7, the IRS can collect the money owed from executives, officers, owners, and sometimes even employees or contractors. You need a payroll tax attorney today.

Talk to an Employment Tax Attorney Today

The employment tax attorneys at Sodowsky Law Firm, PC have helped several individuals and their businesses recover from IRS and state-level tax issues. If your business is currently being audited or otherwise in the IRS’s crosshairs, call a skilled Virginia tax attorney. we can help navigate these treacherous waters, develop and implement a resolution plan, which may be an installment agreement or an offer in compromise, and otherwise help protect your business and assets from the IRS.