How to Settle 941 Payroll Taxes: employment tax settlement – Summons form 6637 from an IRS RO Revenue Officer

Many times we come across news that a certain Company has filed for bankruptcy or has shut down or has downsized its staff. One of the most probable reasons is the failure to pay or settle unpaid payroll taxes known as employment taxes or 941 taxes. The very words ‘payroll taxes’ have made many organizations grovel on their knees.

Have you received a Summons form 6637 from an IRS RO Revenue Officer? Do not delay your matter anymore, you have the right to be represented by a power of attorney, do not speak to the RO, kindly request their business card and inform them that a representative will contact them shortly.

For 941 payroll tax immediate help call us at 877-788-2937.

What are payroll taxes?

Payroll taxes are the amounts of money that an employer withholds from the employee to pay for the taxes owed by the employee to the government. It can also be the amounts of money an employer withholds from the employee to pay for the employee’s social security and Medicare. These withheld amounts of money are deducted from the net wages of the employee/s and sent to the IRS. Also known as “941 taxes” or “Trust Fund Taxes”, these taxes are applicable to every company irrespective of its size. When it comes to collection priority of the IRS, payroll taxes top the list.

In many cases the obligation to settle payroll taxes is not taken seriously or totally ignored by the employer/s. This will have an adverse effect not only on the company but also on the employees. This often results in the closure of the organization by the IRS as well as the seizure of the assets owned by the organization. In addition to this, if any company official is found guilty or even remotely as a responsible person, he/she may be charged under the Civil Trust Fund Penalty and may have to pay the whole amount himself/herself.

Regardless whether the business has been closed, assets being seized, you must make arrangements to settle payroll taxes. The problem will not go away on its own but rather is here to stay until you have arranged to settle payroll taxes. No amount of groveling or shoveling will work. The IRS won’t be deterred. By not paying or making arrangements to settle payroll taxes, you will even risk losing your personal finances.

How to settle payroll taxes?
Though the IRS is considered barbarian by companies, it is not. Though the IRS is just a federal body, it is quite humane in nature. Organizations that have fallen behind on payroll taxes can find resolution as the IRS is known to settle unpaid back payroll taxes for many companies. If approached in a proper manner, it is willing to work with organizations and come up and agree to different payment plans drawn up that can be paid over a period of time.

Installment Agreement: This is one of the payment plans that can be worked out with the IRS to settle payroll taxes. The IRS is sensible enough to understand that some times, many organizations cannot pay the entire amount of money owed at once. For this, the IRS has come up with the Installment agreement that allows the companies to settle payroll taxes in easy manageable equal monthly installments. To set up this agreement, an organization has to fill form 433-B, which can be obtained at their office or can be downloaded online.

Partial Payment Installment: Through this payment plan, a company needs to fill a 433-B form that calls for detailed information about income, liabilities and assets of that company. After comparing this given information with owed amount, the IRS will then decide whether the company is eligible for this payment plan or not. After the IRS agrees to this payment plan, the organization has to make monthly payments which depend on what they can afford. This is to be done until either the payroll tax debt is paid off or the statute of limitations expires. If there is still any debt remaining, after the statute of limitations expires, it is waived off.

Offer in Compromise (OIC): If a firm has used up the above two payment plans and yet hasn’t been able to settle payroll taxes, then they can go for OIC. This payment plan allows companies to settle payroll taxes for less than the full amount. This payment plan will work only if it is in the best interest of both the organization and the IRS and wherein the company complies with all future payments and filings.

Currently not Collectible: After going through the financial records of the company, if the IRS finds that the organization just cannot pay its taxes ever, then the payroll taxes are just simply put off for now.

When the need arises to settle payroll taxes, the first thing that needs to be done is get professional help. Mike Habib, an IRS licensed enrolled agent and the founder of the company, will assist your organization in finding the best option to settle unpaid 941 payroll taxes as well as assist in organizing and filing all the financial statements and documentation that is required by the IRS.  Call him up at 877-788-2937 for a free confidential consultation that will put the problem of payroll taxes behind you.

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