Employers are required to withhold Social Security taxes, Medicare taxes, and income tax from employee wages. These are typically called withholding taxes or trust fund taxes because these funds always belonged to the IRS and were held by the employer in trust. Employers are required to submit the trust fund taxes to the IRS. Additionally, the employer needs to file with the IRS quarterly employment tax returns on Form 941 and annual unemployment tax returns on Form 940. The IRS aggressively enforces the collection of unpaid trust fund taxes along with interest and penalties. In addition to pursuing the employer, the IRS may assess the Trust Fund Recovery Penalty for the full amount of the trust fund taxes against company officers and responsible parties. The IRS has the power to shut down the business and liquidate the assets to pay the trust fund taxes. Furthermore, the IRS can criminally prosecute company officers and responsible parties who willfully fail to file employment tax returns or to pay the trust fund taxes of the employer. Reach out to a Washington DC trust fund recovery penalty lawyer for a consultation.

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Experience & Practice Areas

Mr. Pontius has extensive examination experience with federal and state audits, protests of proposed adjustments and audit reconsideration. He represents clients on tax liens and levies, collection due process hearings, offers in compromises and requests for penalty abatement. He has experience with employment tax issues such as worker classification and the trust fund recovery penalty. Prior to founding Pontius Tax Law, PLLC, Mr. Pontius practiced for five years at Maryland tax controversy law firms in Rockville, Annapolis, and Bethesda. Mr. Pontius has two years’ experience in the international corporate tax group at KPMG in Tysons Corner, Virginia where he researched and analyzed a wide range of complex tax matters in the areas of compliance, provision, planning, and restructuring. At the accounting firm, Mr. Pontius worked with a broad range of U.S. multi-national and foreign-owned clients doing business as corporations and partnerships in the communications, financial services, and defense contractor industries.