Form 941 is a quarterly payroll report filed by employers indicating employees’ wages, tips, withheld tax, medical, taxes, and social security taxes. It is a form of trust fund because the employer is in a fiduciary position to hold fund on employee’s behalf before the government receives it. If an employer fails to do so, it may result to tax liability and accumulation of employment tax debts under form 941 and 940. Consequently, the IRS may decide to get the debt through levies, liens, the sale of assets or getting the business’ trust fund from officers. A person may also end up bearing personal, civil and criminal liability.
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There is a need to hire a tax advocate for both big and small businesses. The tax power of attorney, CPA, EA, Lawyer is usually hired because officers, management, are deemed to be liable in case of any default in the submission of employment payroll form 941. The attorney-in-fact, therefore, ensure that the form 941 is well prepared and submitted on time and reach a resolution. The attorney-in-fact will also ensure that the right deductions and the full amounts have been sent to the government. A tax representative, power of attorney, advocate has vast knowledge in federal tax matters and will navigate more easily in overcoming all the challenges and ensuring full compliance to all that appertains form 941/940. A layperson or a typical taxpayer would find it difficult going through the process of providing proper deductions and remission of the necessary payroll employment funds to the government.
Failure of compliance attracts legal consequences which may result in criminal prosecution. It is essential therefore that one gets representation from a tax lawyer, CPA, or EA because they understand legal implications and legal defenses that one can use. The sooner the intervention, the higher the possibility of protecting you from prosecution. An attorney-in-fact, POA, can also negotiate on your behalf so that the IRS can lessen your liability. This essentially reveals that in cases involving noncompliance with form 941/940 legal tax representation is very vital because these are complex tax matters that not all tax professionals can tackle. One of the defenses that many employers employ is that they had delegated payroll duties to a third party. It should not only be assumed that you are liable because you were in authority or that you are the owner of the business that has failed to submit or 941 employment payroll tax. The attorney-in-fact, EA, CPA will be in a position to better explain such delegation and who the right persons to be charged should be and secure a resolution.
Additionally, if one shows that s/he was acting under the direction of a superior person not to make the payment, s/he could still be responsible. If at the time the tax was withheld a person was not under any responsibility, he shall not be held accountable. Besides, if by the time you took charge of the business it was insolvent, you will be absolved of payroll trust fund liability. All these exceptions require someone with the knowledge of rules governing the situations for there to be a 941/940 tax resolution success.
The EA, tax attorney, CPA will be helpful in cases where the tax authorities will want to auction the business properties to recover amounts arising from non-remittance of employment payroll taxes. The power of attorney will help in protesting the move by filing an appeal, protest, the IRS from collecting the assets and from prosecuting the employer. From the above discussion, it is evident that having representation by a power of attorney enables one to discuss available options that you can use to avoid liability more problems.
Get a free case evaluation by calling us at 877-788-2937 – all 50 states.