Internal Revenue Service will not compromise while inspecting on pay-roll taxes, tax- advocates confirmed. Many will suffer consequences on having to deter tax payments,
Payroll taxes are federal or central taxes that an employer is entitled to pay or withhold on behalf of his employees. Under its fold, the employing organization has to take the liability of paying social security and Medicare taxes also. There have been a large number of cases where small business entities or small companies have been found deterring central payroll tax payments. The tax lawyers express that following this the IRS has started acting stricter about exercising penalties and fine on accountants, executives, and business individuals for the tax-delays or evasion.
Paying business payroll taxes must be considered a priority. The different tactics available at the hands of the IRS to treat these cases are freezing a company’s business accounts, grabbing assets, imposing garnishment on wages of a debtor. Other than tough methods it can assess substantial penalties and impose tax liens on the property of the defaulters.
In the opinion of Sanjiv Gupta CPA, the payroll tax debt can be very dangerous so much so that they can completely bring down the company. To support his argument he described the instance of an equipment company that had to bite the dust for not paying the federal payroll taxes. Similar things happened to a medical care center and a group of licensed schools.
According to the report of government agency findings every year $54Billion as employment dues goes unchecked. To curb this serious loss to the government exchequer the IRS sees it necessary to amend payroll-tax parameters by approximately 6600 employers for the upcoming tax years. Robert E. Mc Kenzie a tax-layer based at Chicago opposes the IRS actions and expresses that the tactics adopted by the IRS by individualizing tax-payers to penalize for defaulting are particularly harsh and cannot treat the actual cause accountable for the tax-debts.
The tax laws allow certain freedom which causes an unnecessary payroll tax debt by laying the sole responsibility of tax evasion on the officers, bookkeepers, business owners, and anyone who prevents the company from clearing employment tax by taking sole control of business accounts and governing the debt payment process.
When the IRS charges penalties the payroll tax debt stands double the actual amount. The three grounds that IRS can exercise its right to penalize are in the case of nonpayment of the debt, failure to state/ itemize the debt and finally for late payment. Fines that are charged for payment delay shot up to 25% tax debt. A person who has previously failed to report tax should not make the mistake of deterring from filing tax in the future. Adverse to this there will be more penalties.
The best way to avoid mounting debts with the addition of penalties is by clearing it off before the deadline and also to pay the taxes to the IRS before it imposes a personal liability.