Payroll Tax Attorney for Back Taxes and Problems with the IRS
As a business owner, you understand the importance of meeting your payroll obligations. But what happens when something unexpected arises and you can’t meet those obligations? One option is to file for bankruptcy, but that isn’t always the best solution and is not always a viable option. Another option is to pay your delinquent payroll taxes. While this may not be an ideal solution, it’s better than facing penalties and interest from the IRS. So if you find yourself in this situation, don’t hesitate to reach out to our business tax attorney for help. Our highly skilled tax lawyers can work with you to develop a plan that meets your specific needs and helps you get back on track. Contact us today to get started!
Failing to pay payroll taxes is one of the most serious tax infractions, and it carries the highest fines. Payroll tax compliance has even caused some small businesses to close their doors.
With the stakes this high, you need someone on your side who knows what they’re doing. Damiens Law Firm, PLLC is the law firm for all tax-related issues. We assist company owners in resolving their tax difficulties so that they can continue to operate.
Payroll Tax Attorney
The Internal Revenue Service has no tolerance for employers who fail to pay payroll taxes. If you’ve made a mistake when calculating your payroll taxes or have accumulated a payroll tax debt, you can expect the IRS to remind you of your tax obligations.
Failure to pay payroll tax can result in financial penalties and even criminal charges. Therefore, business owners who have made a mistake when filing their taxes or misreported wages paid will want to contact business tax lawyers as soon as possible.
In addition, payroll tax debts can negatively impact businesses, so employers must remit payroll taxes promptly to avoid payroll tax issues.
Let a Business Tax Attorney Handle Employment Tax Issues
Payroll tax problems escalate rapidly, and more than one employer has found themselves wondering how they ended up in trouble with the IRS simply because they made an error when withholding funds from an employee’s paycheck. If you’re an employer who failed to collect the appropriate amount of taxes from employee wages, you’ll want to discuss your situation with an experienced tax attorney immediately.
Clients who fail to secure legal representation early in their dealings with the IRS often wish they’d contacted a payroll tax lawyer sooner. The benefits of working with a payroll tax attorney are extensive, and typically clients with attorneys representing them against the IRS have more favorable outcomes than those who don’t.
Payroll tax attorneys have extensive knowledge of payroll law, which enables them to find resolutions for your employment tax issues that lawyers specializing in other areas might overlook.
What Are Payroll Taxes?
Payroll taxes are the money employers must pay to the IRS on behalf of employees. These funds are removed from the employee’s paycheck by the employer and remitted to the IRS periodically.
The federal payroll taxes that most individuals think of when discussing employment taxes are Federal Insurance Contributions Act (FICA) taxes. Social Security tax and Medicare tax make up FICA taxes. Depending on the state the business is located in, state and federal income tax may be included with payroll taxes.
Income Tax Withholding
Most states require employers to withhold income taxes from their employee’s wages. Only nine states do not, including Tennessee.
Employers in Tennessee will not have to withhold income tax from employees. However, Mississippi does require income tax to be withheld.
Mississippi Income Tax Withholding
Employers in Mississippi must pay the appropriate federal and state agencies the total amount of Mississippi income tax withheld from employees. These payments will be due monthly or quarterly.
If an employer does not withhold the correct amount of taxes or files late, a 10% penalty rate will be added to the amount due. Also, a delinquent payment will accrue interest at a rate of 0.5% per month.
Payroll and employment taxes: What’s the difference?
There are critical legal distinctions between payroll taxes and employment taxes, despite the fact that they are frequently used interchangeably. They do, however, differ in how they are applied.
The employer pays employment taxes directly to the IRS. These generally include:
- Federal Income Tax
- Social Security Tax
- Medicare Tax
- Taxes related to the Federal Unemployment Tax Act
Payroll taxes, on the other hand, are commonly defined as such on IRS Form 941. These include payments withheld from employee wages and matched by employers for Medicare or Social Security. Employers must submit Form 941 quarterly to the IRS in order to disclose these withheld taxes.
Our business tax lawyer can help if you have forgotten to file your payroll taxes this year
Failure to report and pay payroll taxes can result in hefty penalties. If you are in a position to administer payroll tax matters, the IRS may impose personal liability on you. The penalty can be as much as 100% of the amount withheld if the employer is small and retained a lot of tax funds.
The penalty for not paying payroll taxes on time is determined by how much you owe and how late the payment is.
Tell our payroll tax lawyer the amount of tax you have to pay
Payroll tax is a tax that is levied on the wages paid to employees by their employers. The amount of payroll tax that an employer has to pay depends on the amount of wages paid to employees and the number of employees. Payroll tax is used to fund various social welfare programs, such as health care and unemployment benefits. Payroll tax is also used to fund the Social Security system. Payroll tax is generally collected by the federal government from employers and then distributed to the states where the employers are located.
How to avoid payroll tax penalties? Employers should improve payroll procedures for employees to avoid employment taxes. It’s easier to say than to do, but the hints provided here by our payroll tax attorney are helpful.
Types of payroll taxes
Payroll taxes are a type of tax that is deducted from an employee’s wages. Payroll taxes are generally divided into two categories: federal and state. Federal payroll taxes are imposed by the government and are used to fund programs such as Social Security and Medicare. State payroll taxes, on the other hand, are imposed by state governments and are used to fund programs such as unemployment insurance. Payroll taxes can be a significant expense for businesses, but they also help to ensure that employees have access to vital social programs.
The Internal Revenue Service collects penalties and charges in a case where an employee doesn’t pay the payroll tax or report a tax. You may face federal criminal liability if you fail a federal tax audit. In some cases, employers can also outsource the job to a payroll company and bookkeeper, which is recommended if you’re unsure of the process.
What are the delinquent payroll tax rates?
The delinquent payroll tax rates vary depending on the amount of taxes owed and how late the payment is. The penalty for not paying payroll taxes on time is determined by how much you owe and how late the payment is.
If you’re required to file a return, penalties will be imposed if you don’t do so within three months of the due date. The penalty is 5% of the unpaid tax for each month or part of a month that the return is late, up to a maximum of 25%. If you don’t pay the tax you owe within 21 days of receiving a notice of deficiency, you’ll be charged a failure-to-pay penalty of 0.5%.
How do unpaid payroll tax penalties work?
Unpaid payroll taxes can result in significant penalties from the IRS. However, many business owners are unaware of how these penalties work. Essentially, if you fail to withhold payroll taxes from your employees’ paychecks, you are responsible for paying those taxes plus interest and penalties. The amount of the penalty is based on how long the taxes remain unpaid. The first offense results in a penalty of 10%, while subsequent offenses carry a penalty of 15%. In addition, interest will accrue on unpaid taxes.
As you can see, failing to pay your payroll taxes can have serious consequences. If you are having trouble making ends meet, it’s important to speak with a business tax lawyer to explore your options. With careful planning, you can avoid these steep penalties and keep your business running smoothly.
What are unpaid payroll tax penalties?
For employers who do not meet payroll duty, the IRS has several requirements including fines and penalties, although some are common. Most frequently encountered errors involve Form 941 – Withholding tax or FICA – taxes. Some may also apply to other similar forms. The TFRP penalty requires a “willful” failure to act, but it may still result in penalties if you fail to pay taxes. Deposits apply for a current liability, so take care of your deposit before they expire.
Payroll taxes are trust fund taxes?
Trust fund tax is the revenue collected by a person — typically a client or employee — and held by a corporation in trust before being returned to the appropriate tax agency. Sales taxes and payroll taxes are common trust funds taxes. The IRS has the option of imposing penalties on businesses based on unpaid taxes. This TFRP will require IRS approval for failure to implement these “willful” tests. Willful is defined according to the Internal Revenue Service as voluntary, knowingly, and intentionally.
If the IRS concludes that a business owner has willfully neglected to withhold or remit payroll taxes, the TFRP penalty will likely be assessed. This penalty is designed to recoup lost revenue for the government and to deter future delinquent behavior. The TFRP can be imposed on any responsible person who was required to withhold or pay over taxes but willfully failed to do so. This includes officers, directors, shareholders, and other individuals with control over the company’s finances.
The Internal Revenue Service (IRS) is the United States federal government agency that collects taxes and enforces tax laws. The IRS is responsible for collecting taxes from individuals and businesses, as well as enforcing tax laws. The IRS has a number of tools at its disposal to collect delinquent taxes, including levies and liens.
The IRS has several tax-filing deadlines, and the IRS has a number of different ways to file your business’s tax. You can use the IRS’ tax form, 941. You can also file for your business’s tax using the IRS’ online business system and its mobile app. You can even file for your business’s tax by calling 1-800-829-4933. The IRS also has several tax-preparedness resources that can help businesses with their tax-filing processes.
Our Business Tax Attorney Can Help with Trust Fund Recovery Penalty
The Trust Fund Recovery Penalty is a heavy price to pay for not paying payroll taxes. With the penalties and interest, the balance owed can quickly turn into a liability that is unmanageable. The best way to avoid the Trust Fund Recovery Penalty is to ensure that payroll taxes are paid in full and on time. If you are falling behind on your payroll taxes, take action to catch up as soon as possible. The sooner you can bring your account up to date, the less likely you are to face penalties. The Trust Fund Recovery Penalty is a serious matter, but it can be avoided with proper planning and diligent tax payments.
Payroll Deposit Penalty
In most cases, a deposit penalty may have been imposed for late remittances and no refund for payroll. The penalties also apply when the payroll taxes are only partially paid out despite the partial payment being processed promptly in full. A penalty can vary in severity depending on many different factors. Here, an experienced tax advisor can help. The tax authorities have also waived deposits for paying payroll taxes in some cases late in the payment process. A refundable deposit is also deductible to avoid late payment if it is based solely on defective or willful restitution of a deposit.
How to calculate payroll taxes?
It’s no secret that the government requires a lot of money to function properly. One of the main ways it raises revenue is through taxes, and one of the most common types of taxes is payroll tax. Payroll tax is levied on wages and salaries, and it’s generally the responsibility of the employer to withhold the correct amount from their employee’s paychecks and remit it to the government.
Calculating payroll taxes can seem daunting, but it’s actually not too difficult once you understand the basics. Our payroll tax lawyer explains how payroll taxes work and shows you how to calculate them for your employees. After reading this article, you should have a good understanding of how payroll taxes work and how to calculate them correctly.
The government charges an imputation fee of 1% to the federal government for payroll and FICA. Employers deduct 6.2% from employees’ gross salary as part of their retirement benefits. All told, this sum is 7.65% and employers should match that percentage. In addition, the government also has a Medicare Tax of 0.2 percent for employees earning more than the specified limit. In addition, taxes for unemployment and income taxes are required for a given period of time. Earned income tax varies based on withholding certificates from workers and income tax brackets.
The cost of payroll taxes varies based on the total amount of employee income. If you’re unsure, you should consult with your business’s human resources department, because payroll tax calculations are more complicated than you might think, especially if you employ people for more than one pay period.
What is the penalty for not paying payroll taxes?
Those convicted in the restitution case can be convicted of a felony and liable for restitution or imprisoned for a maximum of ten years in prison.
What happens if I owe payroll taxes?
The penalties include two percentage points of interest for deposits with an average of five days in lateness. The penalties are 15 percent if a taxpayer hasn’t paid taxes within 30 days. If the delinquent taxes are not paid within 60 days, a fine of five percent is levied. After 90 days, another five percent late fee applies. So, all in all, that’s 30 percent in penalties and fees if delinquent payroll taxes are not paid within three months.
How can I avoid paying penalties for delinquent payroll taxes?
If you’re worried about being unable to pay your delinquent taxes, it’s important to take action as soon as possible. The sooner you can bring your account up to date, the less likely you are to face penalties. You may also want to consider hiring a business tax attorney to help you navigate the process and ensure that you’re taking the right steps to avoid penalties. Paying your delinquent taxes can be a difficult process, but it’s important to do everything you can to avoid penalties. With the help of a business tax lawyer, you can ensure that you’re taking the right steps to stay compliant and avoid costly penalties.
Can payroll taxes be forgiven by IRS?
Tax liability forgiveness by the Internal Revenue Service is possible to help businesses withhold payroll tax or payroll deductions. The IRS Fresh Start program offers delinquent taxpayers a number of penalty abatement options to help them get caught up on their taxes. The payroll tax amnesty program is one such option that can provide delinquent taxpayers with relief from penalties. If you’re behind on your payroll taxes, it’s important to take action as soon as possible to avoid further penalties.
The IRS offers a number of programs designed to help businesses catch up on delinquent taxes. With the help of a payroll tax attorney, you can explore your options and find the best solution for your situation.
Who is liable for unpaid payroll taxes?
Specifically, a company or corporation that has not paid payroll tax, e.g., an employee, is personally responsible for the tax incurred. The amount of tax and any interest and penalties incurred are personally liable. The company or corporation is not protected from personal liability.
Do I Withhold Payroll Taxes For Independent Contractors?
An employer is responsible for withholding and paying taxes on an employee’s paychecks but not on the money paid to independent contractors. Self-employed individuals or independent contractors will be responsible for paying the taxes that would normally be paid by the company employing them.
While using independent contractors may seem like an excellent way to avoid paying Social Security, income, and Medicare taxes, you’ll want to take care when labeling a worker as an independent contractor or employee.
The IRS has strict guidelines defining employee classification; violating them to lower your company’s payroll tax will result in severe penalties. Sidestepping the law in an attempt to collect and pay fewer taxes now will result in trouble down the road if your employee reports you to the IRS.
How do I file delinquent payroll taxes?
You can file delinquent payroll taxes by filing Form 941 for the appropriate quarter. You will need to include the delinquent tax amount, as well as any interest and penalties that have accrued. You can also make arrangements to pay the delinquent taxes over time through an installment agreement. If you’re unable to pay the delinquent taxes in full, it’s important to take action as soon as possible to avoid further penalties.
What is the statute of limitations on delinquent payroll taxes?
The statute of limitations on delinquent payroll taxes is 10 years from the date the taxes were due. If you’re facing delinquent taxes, it’s important to take action as soon as possible to avoid further penalties. The sooner you can bring your account up to date, the less likely you are to face penalties. You may also want to consider hiring a tax professional to help you navigate the process and ensure that you’re taking the right steps to avoid penalties. Paying your delinquent taxes can be a difficult process, but it’s important to do everything you can to avoid penalties
How do businesses end up with delinquent payroll taxes?
Businesses end up with delinquent payroll taxes for a variety of reasons. In some cases, the business owner may be unaware of their tax obligations. In other cases, the owner may be deliberately trying to avoid paying taxes. However, the most common reason for delinquent taxes is simply an oversight or mistake. With so many businesses struggling to stay afloat, it’s no surprise that tax payments sometimes fall through the cracks.
In recent years, some businesses have incurred payroll tax bills due to failing ERC audits. For instance, this happens when a return with incorrectly claimed ERC is selected for an audit. When the IRS realizes the credit was claimed erroneously, they remove the credit, leaving the taxpayer with an unexpected tax liability.
The good news is that there are options available for businesses that find themselves in this situation. Many states offer payment plans that can help businesses get back on track. By taking advantage of these payment plans, businesses can avoid penalties and interest charges while getting their tax situation back in order
Why Do I Need a Payroll Tax Lawyer?
Business tax lawyers will help you navigate your business out of a tight spot with the IRS while still following federal and state law. There are numerous ways your business tax lawyer can help you fix your payroll tax problems, including the following:
- Negotiate with the IRS and state agencies on your behalf
- Establish a payment plan with the IRS for your tax debt
- Avoid the assessment of personal liability for trust fund penalties
- Secure a temporary moratorium on payroll tax
- Receive not collectible status from the IRS
- See if the statute of limitations for unpaid payroll tax has expired
Failure to Pay Payroll Taxes Escalates Quickly
Many businesses that end up with payroll tax debt find themselves in that unpleasant situation due to a lack of cash flow. The employer cannot afford to pay their payroll tax payment, so against their better judgment, they decide to skip one and do not discuss their situation with a business tax lawyer.
From there, things often snowball until penalties and interest have caused the payment owed by the business to become so large that the employer is incapable of paying it entirely. This failure to remit payroll tax can result in the IRS choosing to seize business assets or even bringing criminal charges against the employer or responsible parties.
Penalties on Payroll Tax Debts
If you’re like most business owners, you’re always looking for a way to cut down on business expenses. Payroll tax penalties are a business expense you can avoid as long as you follow tax law and promptly make your tax payments to the IRS.
The most common causes of payroll tax issues resulting in penalties are incorrectly calculating employment taxes, missing filing deadlines, and misreporting taxes.
While there are exemptions you can seek for unreported or late tax payments, such as natural disasters, death, or unavoidable absence of the responsible person, it’s far simpler to file your employment taxes correctly and on time than it is to try to prove to the IRS that you had reasonable cause for your failure to pay.
Contact a Business Tax Lawyer Today
If you don’t address your payroll debt immediately, it can cause significant tax problems for your business. Business tax attorneys will review your situation and communicate with the IRS to help find the best solution for your payroll tax problems.
There are avenues you can explore to obtain tax relief, but you’ll need a seasoned attorney to guide you. Payroll tax debts can devastate businesses, so a letter from the IRS about tax problems pertaining to your business is something to take seriously.
Tennessee and Mississippi Taxpayers Trust Damiens Law Firm, PLLC
Whether you misclassified an employee as an independent contractor or need to catch up on filing your payroll taxes, our firm is prepared to face the IRS on your behalf. Our clients know that we will do everything in our power to secure the best resolution possible for their payroll tax problems.
Protect your business assets and bank accounts by working with a business tax lawyer. Give Damiens Law Firm, PLLC, a call today at 601-488-2079. We can also help you deal with other business tax obligations and problems, including state sales tax from Mississippi or other states.