A business that has employees is required to withhold and pay over collected payroll taxes to the Internal Revenue Service. Failure to do so can result in a tax lien against the business for those taxes. What owners and/or bookkeepers fail to realize, until it is too late, is that in order to encourage a business to timely pay their payroll taxes, the IRS is allowed to assess a "trust fund recovery penalty" against any individual that the IRS deems may have been responsible for payment of the taxes. This penalty can be assessed against a shareholder, director, officer, employee and/or any individual who may be authorized to sign checks on behalf of the business. The IRS can designate more than one person as a responsible person.
Once the IRS has determined that an individual is a responsible person, they may propose filing a tax lien against that individual for the trust fund recovery penalty and begin collection proceedings against that individual for the taxes owed.
Should your business owe delinquent payroll taxes and wish to discuss what options you may have, please e-mail me at helptax@consolidated.net or contact me at (412) 926-0791 or (724)612-2993.