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Can I be held [Personally Responsible] for my company’s Payroll Taxes?

As a business owner, officer, controller, or bookkeeper, you will no doubt be well-aware of the various roles and responsibilities you need to carry out on a daily basis to keep your business ticking over. In an effort to cut costs, or sometimes through sheer stubbornness, business owners with no prior tax or accounting experience will often also try to handle the taxes and accounting issues of their companies, rather than hiring professional tax services. Needless to say, this is a very time-consuming job, and it can also be stressful if you don’t know what you’re doing. You may think that by not hiring a tax lawyer or tax professional enrolled agent, CPA, attorney-in-fact to help you, that you are saving money, yet in reality the exact opposite is true. Take trust fund payroll taxes for example. If you fail to handle them correctly, you could be held personally responsible for your company’s payroll taxes.

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Here is a better look:

What exactly are trust fund taxes? – Trust fund taxes are comprised of a combination of an employee’s share of social security and Medicare taxes, along with any income taxes that may have been withheld from 941 payroll taxes. They are referred to as trust fund taxes because, as an employer, it is your personal responsibility to retain the money of your employees in a trust fund until it is time to pay taxes owed to the government. A few examples of trust fund taxes include:

  • FICA taxes
  • Railroad retirement taxes
  • Withheld income taxes
  • Collected excise taxes

Payroll trust fund taxes are not paid annually, but rather quarterly. This is where it gets complex for business owners and responsible persons would be personally held liable. Between each quarter, this is the most common time when business owners find themselves on the wrong side of the IRS. Why? Because some have been guilty of using withheld employee taxes to cover other business expenses.

TFRP – Trust Fund Recovery Penalties are penalties issued by the IRS against employers who are responsible for collecting, retaining, and paying trust fund taxes to the IRS, on behalf of their company, yet who have intentionally failed, evaded making said payments. The penalty will be equal to the amount owed to the government, along with accrued interest. TRRPs do not increase the total amount a person owes like other IRS penalties do, but they are assessed meticulously. If you are issued a TFRP, the first thing you will need to do is seek professional tax help from a tax lawyer, enrolled agent, CPA, attorney-in-fact.

Why hire a tax professional? – Tax professionals such as tax lawyers, enrolled agents, CPAs, attorney-in-fact are trained to deal with all things tax-related. They know how the TFRP works like the backs of their hands, and they know exactly what to do, what to say, what to produce, and what to pay. The IRS does not take unpaid payroll taxes lightly, and if you owe, you are held responsible for paying. Hiring a tax lawyer or similar professional tax services enrolled agent, CPA, attorney-in-fact will give you peace of mind as they will do the metaphorical heavy lifting for you. If there has been a genuine mistake made by the IRS holding you personally as a responsible person, and believe us, it does happen, they will also help rectify things ASAP.

Get a free case evaluation at 877-788-2937.

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Mike has given us peace of mind! He helped negotiate down a large balance and get us on a payment plan that we can afford with no worries! The stress of dealing with the IRS is huge and Mike helped us through it all. The peace of mind is invaluable, thank you Mike!April S.
Mike Habib - Thank you for being so professional and honest and taking care of my brothers IRS situation. We are so relieved it is over and the offer in compromise process went just as you said. Mike is very professional and will give you honest answers to the OIC process and you can really trust him. You won't be sorry you chose him!Joe and Deborah V.
Mike is a true professional. He really came thru for me and my business. Dealing with the IRS is very scary. I'm a small business person who works hard and Mike helped me see that they are not that scary after all. He was always there with the answers I needed and was very good about calling me back which I appreciated since your first reaction is to freak out and ask a million questions. He solved a messy case and worked very hard to resolve it. His rates are VERY reasonable for the amount of work he does! I give him my highest recommendation!Marcie R.
Mike was incredibly responsive to my IRS issues. Once I decided to go with him (after interviewing numerous other tax professionals), he got on the phone with the IRS immediately (as in the same day I signed with him) to squash an impending issue. And he worked directly with them to quickly come to a resolution I am very happy with. I'd highly recommend reaching out to Mike to see if he can help you with any IRS issues. I'm very satisfied!Marshall W.
I’ve seen and heard plenty of commercials on TV and radio for businesses offering tax help. I did my research on many of them only to discover numerous complaints and unresolved tax issues. I found Mike Habib through my own online search and contacted him. He was very professional with great communication, always answering my questions and concerns. Mike resolved my complicated tax problem just as he said he would. I would definitely recommend his services to family and friends.Nancy & Sal V.
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