Many businesses have an obligation to withhold workers’ Medicare, Social Security, and income tax deductions aside, in trust, until they must remit them to the government through the Electronic Federal Tax Payment System. If you do not remit these deductions at the specified time, you may be hit with a penalty. That is when you need an Alexandria trust fund recovery penalty lawyer to intercede.
In very rare cases, a business might be liquidated in order to account for the missing funds, but you can usually address the issue administratively. A resourceful tax lawyer may be able to analyze your situation and come up with an adequate response that gets your business back into compliance.
Anointed officers for a business must file a Form 940 once a year and a Form 941 once a quarter. The IRS can look beyond the business owner to collect trust fund recovery penalties (TFRP). They determine who the officer should be, what other management decision they have, and whether they intentionally failed to remit payroll taxes. The people they identify are jointly and severally liable for the penalty, which means the IRS can demand the money from one or all of them. Those at risk include:
IRS revenue officers can examine bank statements and other financial information to determine who controls funds and writes checks, thus identifying all responsible parties. They then conduct interviews and file a Form 4180 report titled “Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes.” This is the key moment when the interviewer, usually in person, names someone as a party responsible for paying the trust fund penalty.
If the IRS believes someone was the party responsible for remitting the payroll taxes, they will receive a proposed assessment and 60 days to appeal it before the assessment is carried out. It is a good idea to consult with a trust fund penalty recovery lawyer in Alexandria about whether this can be appealed or abated.
In order to make good with the IRS, the business will need to pay the trust fund tax they owe through an installment agreement. If they have some funds but not enough to settle the full tax, the IRS may even consider an offer in compromise in which they take less money than was assessed. The IRS will determine the business’s ability to pay before considering this option.
By applying for Currently Not Collectible (CNC) status, it can pause any IRS collection efforts temporarily. The business must show that paying this amount would impact their ability to pay the necessary expenses, such as payroll and rent. An Alexandria trust fund recovery penalty lawyer could help determine which option is ideal for a particular business.
Businesses both big and small have many obligations they must meet, including to the federal government. Certain officers are charged with remitting their payroll taxes to the IRS. When this does not happen, the IRS may assess a penalty. At Pontius Tax Law, our Alexandria trust fund recovery penalty lawyer could assess your business’s financial standing and forge a path that allows you to make good with the IRS. Give us a call for a consultation.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Vienna, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.