If you are a business owner or previously owned a now defunct business, you may be required to pay employment or payroll taxes to the IRS. These include social security and Medicare taxes to benefit workers and their dependents.
Employers are required to furnish two main payroll tax forms:
- Form 940 – The Employer’s Annual Federal Unemployment Tax Return (FUTA)
- Form 941 – The Employer’s Quarterly Federal Tax Return
Failure to fill and submit any of the above two forms is viewed as a serious offense, and the IRS may even initiate an audit to determine if there are additional parties from whom tax can be collected.
There are two very important things to understand about owing payroll taxes or employment taxes:
- The penalties and interests accrued on tax debts of this kind increase exponentially in a matter of months.
- It is extremely difficult to get tax relief schemes because the IRS can deem a company’s value higher than the taxes owed, which makes you unable to apply for any tax relief programs.
Owing employment/payroll taxes to the IRS is viewed as a major offense, and failure to repay on time can have serious financial consequences. For a company with an unstable financial situation, the IRS can add to this instability when it forces repayment. This often has the effect of further destabilizing the company. In extreme cases, the IRS may even close the company and liquidate its assets in an attempt to settle the debt. For now defunct businesses, previous owners can be examined and asked to settle the debts, which are sometimes large sums.
A certified professional tax expert will ensure your payroll tax and employment tax problems are solved as soon as possible. Without expert help, you risk losing your business or criminal prosecution. Long Island Tax Resolution Services will act as a liaison between you and the IRS to negotiate terms of settlement. Often, tax debts of this kind can be settled with payment plans, and they should be dealt with as soon as possible to prevent seizure of assets, financial instability or company closure.