Payroll and Employment Tax Attorney
Unpaid payroll taxes are among the more serious federal tax problems a business can face. The IRS may pursue the business and, in some situations, individuals it believes are responsible for collecting and paying trust fund taxes.
Attorney Todd S. Unger helps businesses, owners, officers, and other potentially responsible individuals address IRS payroll tax problems, employment tax audits, Trust Fund Recovery Penalty investigations, liens, levies, payment arrangements, and related collection issues.
Why IRS Payroll Tax Problems Are Different
Payroll tax problems are treated differently from many ordinary business tax debts because part of the liability may consist of taxes withheld from employees. Employers collect those trust fund amounts but must remit them to the federal government.
When those amounts are not paid, the IRS may investigate not only the business but also the individuals who had authority over payroll, banking, tax deposits, or financial decisions.
Important: Personal liability is not automatic merely because someone owns or works for the business. The IRS generally examines responsibility and willfulness before assessing a Trust Fund Recovery Penalty.
IRS Payroll and Employment Tax Problems We Help With
Payroll tax problems can involve filing, deposits, classification, audits, penalties, personal exposure, and active collection. Todd S. Unger helps evaluate the immediate risk and the broader resolution strategy.
Form 941 balances, missed deposits, and unpaid withholding or FICA obligations.
IRS examinations involving payroll reporting, classification, deposits, and employment tax compliance.
Investigations into whether individuals may be personally responsible for unpaid trust fund taxes.
Disputes involving employee versus independent-contractor treatment.
Federal tax liens affecting business assets, borrowing, transactions, and financial flexibility.
Collection actions against bank accounts, customers, processors, or accounts receivable.
Review of payroll deposit penalties and whether penalty relief may be available.
Evaluation of installment agreements and other collection alternatives for qualifying businesses.
Trust Fund Recovery Penalty and Personal Liability
When trust fund taxes go unpaid, the IRS may investigate individuals responsible for collecting, accounting for, or paying those taxes who may have acted willfully in failing to ensure payment.
The IRS may look at who controlled bank accounts, signed checks, authorized payments, handled payroll, made tax deposit decisions, or decided which creditors were paid.
An ownership title alone does not determine liability. The facts surrounding actual financial authority and conduct matter.
IRS Employment Tax Audits
An IRS employment tax audit may examine payroll deposits, Forms 941, Forms W-2 and 1099, worker classification, compensation arrangements, and whether you reported and deposited taxes correctly.
The IRS may also examine corrected payroll filings, third-party payroll records, bank statements, or internal financial records.
If an examination could lead to additional tax, penalties, or a responsible-person investigation, careful preparation before producing documents or participating in interviews can be especially important.
Failure-to-Deposit Penalties
Employers that fail to make required federal tax deposits on time may face failure-to-deposit penalties. The applicable penalty generally depends on how late the deposit is and whether the IRS has issued a demand for payment.
These penalty tiers should not be described as percentages that simply stack on top of one another. Instead, the applicable rate generally increases based on the length and circumstances of the delinquency.
Depending on the facts, the business may also need to evaluate whether penalty relief is available. Learn more about IRS penalty relief.
Business Liens, Levies, and Collection Risk
Payroll tax debt can move into active collection if it remains unresolved. Depending on the case, the IRS may file a Notice of Federal Tax Lien, issue levies, contact customers or payment sources, or pursue other collection remedies.
A levy against a business bank account or accounts receivable can create immediate operational pressure. Businesses facing active collection should evaluate both the immediate enforcement issue and the longer-term tax resolution.
If collection has already escalated, review our page on IRS levies and wage garnishment.
IRS Payment Arrangements for Payroll Tax Debt
Some businesses may be able to resolve payroll tax balances through an installment agreement or another collection arrangement, but ongoing compliance is usually critical.
The IRS may review whether required returns have been filed, whether current deposits are being made, whether the business can remain compliant going forward, and whether financial disclosure is necessary.
Learn more about IRS installment agreements.
Facing an IRS Payroll Tax Problem?
If your business owes payroll taxes, is under employment tax examination, or is facing a Trust Fund Recovery Penalty investigation, Todd S. Unger can review the notices, tax periods, responsible-person issues, and collection status and help determine the appropriate next step.
What Business Owners Should Do First
Identify the tax periods, notice type, balance, deadline, and whether the issue involves filing, deposits, collection, or personal liability.
Current payroll deposits and required returns may be essential before the IRS will consider a long-term resolution.
If trust fund taxes are unpaid, determine who controlled payroll, banking, check signing, and creditor-payment decisions.
Cash flow, assets, receivables, tax deposits, and ongoing viability can affect the available collection strategy.
How a Payroll Tax Attorney Can Help
Payroll Tax Attorney FAQs
Talk With a Payroll Tax Attorney
If your business owes payroll taxes, is facing an employment tax audit, has received a levy or lien notice, or is dealing with a Trust Fund Recovery Penalty investigation, Todd S. Unger can review the situation and help determine the next step.