IRS Collection Of Employment Taxes
Employment taxes make up two components:
1. The taxes withheld from each employee’s paycheck – FICA, Medicare, FWT and SWT – we call this component Trust Fund Liability.
2. The second category is the employer’s matching share of the FICA Medicare withheld by from each employee’s paycheck.
Now any business will be liable for both components. But that is not enough for the IRS – the IRS will also seek liability for individuals who the IRS determines are “responsible persons”.
Responsible persons will have joint and several liability for the Trust Fund Liability.
Who are responsible persons?
1. Officers, directors – basically any one in the business organization with the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes.
2. Any one whose name is on the business bank account. So the bookkeeper who can sign checks even though having no other authority is a responsible person.
Now at first the IRS will only be looking to collect from the business and if it is incorporated, only the corporation will at first be subject to collection enforcement by the IRS.
However, if the IRS feels they are not collecting enough, the IRS will determine who the responsible persons are and then after that determination has been made and the person fails to appeal that determination, the IRS will now start collection against that person individually.
That’s why it is really important that when a business is falling behind in making its employment tax payments, that you contact the Law Offices Of Jeffrey B. Kahn, P.C as early as possible to mange the situation and come up with a plan.
Description: If your business is behind in employment taxes or the IRS is coming after you for the collection of employment taxes, it’s urgent that you speak with an employment tax attorney. The experienced tax attorneys in the Law Offices Of Jeffrey B. Kahn, P.C. know how to manage this problem and protect you or your business from collection action.