| Going Under: The IRS hits small business hard. They do | | | | such tax, or truthfully account for and pay over such |
| this because they think Small Business makes up the | | | | tax, or willfully attempts to ...evade or defeat such tax |
| majority of tax cheaters in America. So when you | | | | or the payment thereof, shall, in addition to penalties |
| own a Small Business, even your tiniest mistakes are | | | | provided by law, be liable..." In other words, any person |
| magnified. If you're caught not paying your payroll | | | | in charge of paying the taxes can be responsible. This |
| taxes, what will happen? And who will the IRS | | | | can be Accountants, Bookkeepers, and anyone else |
| consider responsible? | | | | with check-signing powers. |
| Making You Pay: When payroll taxes go unpaid, the | | | | Try an Appeal: If the IRS determines you are |
| IRS can hold it's owners, managers, and bookkeepers | | | | responsible for the payroll taxes not being paid, you'll |
| responsible. The IRS transfers the business payroll | | | | get a notice. The IRS tries to find as many people |
| obligation to individuals and blames them for not making | | | | responsible as possible, so there's a strong likelihood |
| the payroll payments. This is called the "Trust Fund | | | | that they sent a notice to someone that doesn't |
| Recovery Penalty" (TFRP). This applies mostly to | | | | deserve it. You have 60 days from when you get the |
| incorporated businesses, but if your small business | | | | notice to file an appeal. You have to file a written |
| was an LLC, partnership, or sole proprietorship, you | | | | protest with the appeals office. If you don't protest |
| can be found responsible for payroll taxes without the | | | | within the 60 days, the preliminary notice becomes final |
| TFRP provision. The penalty equals the taxes owed, | | | | and the IRS will send out a formal notice and demand |
| so it's also called the 100% Payroll Penalty (Internal | | | | for payment. Remember, appealing a proposed TFRP |
| Revenue Code 6672). | | | | will buy time. You can file one even if you are clearly |
| Who To Blame: Internal Revenue Code 6672 states | | | | responsible for the debt. This will keep the IRS from |
| that "any person required to collect, truthfully account | | | | knocking at your door. |
| for, and pay over any tax...who willfully fails to collect | | | | |