Employment taxes are the amount you must withhold from your employees for their income tax and Social Security/Medicare tax, plus the amount of Social Security/Medicare tax you pay for each employee. Federal unemployment taxes are also considered employment taxes. Those taxes are called "Trust Fund Taxes" because the employer holds these funds "in trust" for the government until it submits them in a federal tax deposit.The IRS views failing to pay payroll taxes as the cardinal sin of tax delinquency because a large portion of the payroll taxes are your employees' withholdings. Not paying your company's payroll taxes is tantamount to stealing your employees' money in the eyes of the IRS.
As a result, penalties for failing to pay your payroll taxes and filing your payroll tax returns on time are much more severe than other types of penalties. They can drastically multiply the amount you owe in a very short time. Why, because Congress has passed a law that provides for the "Trust Fund Recovery Penalty". This is a penalty that is assessed personally against the individual or individuals who are responsible for paying the trust fund taxes but willfully did not do so. The amount of the penalty is equal to the amount of the unpaid trust fund taxes.
If you are behind on your payroll taxes, DO NOT meet with the IRS on your own. How you answer their initial questions can determine whether you stay in business or not. It is critical you hire a professional representative who knows how the IRS operates.
Call us at 407-922-8899 with any questions or to schedule an appointment.
RR Accounting & Tax Services
2824 Michigan Ave., Suite A
Kissimmee, FL 34744
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