Never Ignore the Payroll Tax


          For any business, the matter of Payroll Tax is very serious. The IRS looks at it as the government’s money and any failure to pay will trigger an aggressive response. In some cases that could mean fines and jail time. Using money to pay vendors, the landlord, or employees in order to function, is never considered a good reason to avoid paying the Payroll Tax.
          In general, the IRS will pursue Responsible People in a business when this obligation is not being met. This can happen even if they are not personally aware of this Tax not being paid. A Responsible Person is an officer, director, or anyone who makes decisions about paying or who has check signing authority. If Payroll Taxes are not being paid, the IRS will penalize any or all Responsible Persons for the full amount of Taxes owed. This allows them to pursue them each individually in order to collect the Tax.
          An injunction can be put in place to keep a bad situation from getting worse and force the business to pay what it owes in full, plus penalties. A business can also be shut down in order for the IRS to take what it sees as belonging to the government. These situations can also lead to a few or only 1 Responsible Person being left to pay for the Taxes and penalties. To avoid this, make wise choices, never ignore taxes, and seek help early when it’s needed.

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