Payroll Tax Debt—Denver, Colorado

Delinquent payroll taxes can threaten your business operations.

When your Denver business owes the IRS payroll tax debt, it’s not something you should take lightly. The IRS looks at this as a form of theft and will be vigorous in its attempt to collect Form 941 payroll taxes from you. If your business has been assessed a tax lien, we understand the painful financial position you are facing. Business tax liens are public records that show up on your company’s credit report, are made available to all parties you do business with, and can even show up on your own personal credit report as the business owner.

I had fallen behind on my payroll tax payments and had the IRS coming to my place of business to talk to me. I was worried they were going to shut me down. I was referred to True Resolve Tax by a friend of mine. The True Resolve team instantly came in and started talking to the IRS person so I didn’t have to. They helped me to budget for my business better so that I could pay the current taxes and set up a payment plan on the taxes I hadn’t paid yet. The payment is very affordable and the budget help has kept me on track since then also. Great service, great people, great customer service.

~ Michael G., Colorado

What are Payroll Taxes?

All businesses are required to deduct payroll taxes from their employees’ paycheck and deposit them to the IRS based on their depositor schedule. In fact, any moneys you collect in trust for the IRS cannot be used for any other company expenses—no matter the reason and no matter what you owe in taxes.

It is essential to review payroll taxes and understand how to resolve payroll tax debt to minimize your risk of IRS audit and penalties.

If your company fails to collect and transfer payroll taxes to the IRS on time, you can be charged with a Trust Fund Recovery Penalty (TFRP), which you will be notified of via mail. The IRS can assess the TFRP against all responsible persons in your organization who have ownership or signature authority over the company—even if they have no knowledge of the tax debt.

The TFRP penalty equals 100 percent of the taxes not collected. However, you can appeal the penalty within 60 days of receiving the letter. If you don’t respond, the IRS will send you a Notice and Demand for payment and can then collect against you.

How the IRS Collects Payroll Tax Debt
Small business owners have been identified by the IRS as the largest source of uncollected taxes, so the IRS tends to put focus on enforcement of collection against small business owners, especially during hard economic times. Because of how aggressive the IRS gets when dealing with delinquent payroll taxes, the process of resolving this matter can become challenging without professional assistance to get you through the process.

The IRS can seize your business equipment and assets and sell them at auction, effectively putting you out of business by limiting your ability to operate. The IRS can also contact customers who owe you money and tell them to send it to them directly rather than sending it to you. This in turn, can affect your ability to pay employees and other bills, as well as your current and future taxes.

The IRS has the ability to padlock the front doors of your business, making it impossible to continue operations. Your employees, vendors and customers can all come to your place of business and find that the IRS has shut you down.

In extreme cases, the IRS may seek criminal penalties against responsible parties.

Furthermore, the IRS, once they contact you, will expect you to stay current with your Federal Tax Deposits from that point forward and not accrue any new liabilities. This means not only paying them in full, but paying them on time based on your deposit schedule according to how often you process payroll. Should a business accrue a new liability once they are dealing with an IRS agent, the business’ chances of being able to obtain an agreeable payment plan diminish.

What to Do When You’re Delinquent on Payroll Taxes
If you owe payroll taxes, you need to make immediate efforts to resolve the debt because owing payroll taxes can put your business at risk. In order to resolve your payroll tax debt, you may use a payment plan such as an Installment Agreement.

You may also qualify for a reduction or forgiveness of penalties, depending upon the reason for your noncompliance. It may help to enlist a licensed tax professional to determine if you qualify for penalty abatement and which payment plan you can apply for. Choosing the right resolution plan is an important primary step for successful resolution of tax debt.

How True Resolve Can Help
The best way to stay out of trouble with the IRS is to pay your payroll taxes in a timely fashion and in compliance with federal guidelines. But if you get in a bind, the Denver-based tax professionals at True Resolve Tax can help.

We can work with the IRS on your behalf to set up a payment plan and help you resolve your debt. We also offer payroll services to ensure accuracy on your future payroll.