Payroll Tax Protection

Making Mistakes on Your Payroll Taxes is Guaranteed to Turn Uncle Sam’s Eyes in Your Direction!
In the world of taxes, the biggest sin is failing to pay your payroll taxes. Penalties for failure to pay or delinquency in filing payroll tax returns are more severe than almost any other tax penalty.

FYI – If you aren’t paying your company’s payroll taxes, you are stealing money that belongs to your employees according to the government.

Failure to comply with payroll tax laws can result in the loss of your business. The IRS is very aggressive in pursuing these types of infractions and will not hesitate to seize your assets, sell your property at auction, and eliminate your means of making a living.

If you are behind on payroll taxes or have payroll tax problems, it is critical that you get the help of a professional who understands tax law and the way the IRS operates. The way you handle your initial contact with the IRS can make or break your chances of staying in business.

We help our clients by assessing their current situation and helping them find answers that will best preserve their ability to stay in business. If you are delinquent on payroll taxes, contact us today to help with your payroll tax problems.

Frequently Asked Questions - Payroll Tax Protection

What are payroll taxes?

Payroll taxes are employment taxes that employers are required to withhold and remit, including:

  • Federal income tax withholding

  • Social Security tax

  • Medicare tax

  • Federal unemployment tax (FUTA)

The employee-withheld portion (income tax, employee share of FICA) is considered trust fund tax.

Authority: Internal Revenue Code §§ 3102, 3402.

What are "trust fund" taxes?

Trust fund taxes are amounts withheld from employees’ wages that the employer holds “in trust” for the government.

Failure to remit trust fund taxes can result in:

  • Business liability

  • Personal liability for responsible individuals

Authority: IRC § 6672 (Trust Fund Recovery Penalty).

What is the Trust Fund Recovery Penalty?

The TFRP allows the IRS to assess personal liability against:

  • Owners

  • Officers

  • Bookkeepers

  • Payroll managers

  • Any person deemed responsible and willful

The penalty equals the unpaid trust fund portion of payroll taxes.

Personal assets may be pursued once assessed.

How does the IRS determine who is responsible?

The IRS evaluates:

  • Authority to sign checks

  • Control over financial decisions

  • Ability to hire/fire employees

  • Ownership interest

  • Knowledge of unpaid taxes

Both “responsibility” and “willfulness” must be established.

What enforcement actions can the IRS take for unpaid payroll taxes?

The IRS may:

  • Issue bank levies

  • Garnish wages

  • Seize business assets

  • File Notices of Federal Tax Lien

  • Assess TFRP against individuals

  • Close the business in extreme cases

Payroll tax cases are often prioritized for enforcement.

What is a revenue officer?

A revenue officer is an IRS field collection agent assigned to higher-risk or higher-balance cases, including payroll tax liabilities.

Revenue officer cases typically involve:

  • In-person contact

  • Financial investigation

  • Accelerated enforcement timelines

How can I prevent personal libility?

Preventative measures include:

  • Timely deposit of payroll taxes

  • Immediate correction of missed deposits

  • Segregating payroll tax funds

  • Monitoring EFTPS confirmations

  • Ensuring internal financial controls

Once liability accrues, early corrective action is critical.

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