Practice
Payroll and sales tax for owners who've fallen behind
Payroll tax is the debt the IRS pursues hardest, because part of it is money held for employees. Sales tax works the same way at the state level. We work with owners to get current, then settle what's past.
The withheld part of payroll tax can become your personal debt through the trust fund recovery penalty, even if the business closes. Who gets assessed depends on who decided which bills were paid, and that's the question the IRS interview asks.
We prepare you for that interview, sit in on it, and push back when the IRS names the wrong person.
How a payroll tax file usually runs
Four steps. The first one is the one owners most want to skip.
- 01
Step 1: Get current
New deposits have to be made on time before the IRS will agree to anything about old ones.
- 02
Step 2: Pull the numbers
Transcripts for every quarter, matched against your payroll reports, so everyone argues from the same figures.
- 03
Step 3: The trust fund interview
Form 4180 asks who signed checks and who chose which bills to pay. We prepare you and attend with you.
- 04
Step 4: Set the plan
A business payment plan, penalty relief where it fits, and a written answer on personal liability.
What owners ask us
The business closed. Do I still owe the payroll tax?
The business's share may go with it, but the withheld share can follow anyone found responsible and willful. That's why the interview matters.
Can my bookkeeper be held responsible?
Sometimes, if they had authority over which bills got paid. Usually it's owners and officers who signed checks.
We're also behind on sales tax. Is that a separate case?
It's a separate agency, so yes, but we plan both together so the business isn't promising the same dollars twice.
Will the IRS shut the business down?
It can levy business accounts and receivables, and it moves faster on payroll than other taxes. Getting current and making contact early is what usually keeps the doors open.
Missed payroll deposits?
Tell us which quarters and whether new deposits are being made. We'll start there.