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Many businesses in Fairfax have an obligation to withhold portions of an employee’s wages for contributions to Medicare, Social Security, or income taxes. The money is placed in a trust and then remitted to the federal government at the appropriate time. If you do not transfer the trust fund money to the government by a specified point, you could face a penalty, and in rare cases even face asset liquidation. A Fairfax trust fund recovery penalty lawyer could analyze your situation and guide you to a resolution.
The Internal Revenue Service (IRS) will review any failure to pay on time before assessing penalties. The sooner you make these payments, the easier it will be to resolve this issue with the help of a dedicated tax attorney.
Running a business in Virginia is complicated, especially when it has multiple employees. In addition to paying any tax obligations owed by the business, it also has a duty to withhold and submit contributions from individual employees.
There are strict requirements on what is to be done with these funds until they are remitted to the government. The money must be held in a trust account before it is submitted every quarter along with a document known as Form 941. There is also a Form 940, which must be submitted once a year. Any party responsible for failing to make this payment is potentially liable for the trust fund recovery penalty.
This penalty is equal to the amount of money that was intended for the IRS but was not received. An attorney in Fairfax could help you explore your options for dealing with a trust fund recovery penalty – including whether you were the person responsible for remitting the taxes at all.
There are a few ways that an attorney in Fairfax could resolve a trust fund recovery penalty, starting with filing an appeal. If the IRS believes you failed to remit employee tax receipts, it will send you a proposed assessment. You have 60 days from receiving that assessment to appeal.
Outside of the appeals process, there are additional remedies to consider. For example, a business may be able to pay back what it owes through an installment agreement. This process involves paying the full amount of the penalty, but breaking it up into monthly payments over a period of time.
In some rare circumstances, the IRS might consider an Offer in Compromise. This is used when a company lacks the resources to cover the full penalty. The IRS will assess the ability to pay before determining if the business will be allowed to resolve the debt of less than what is owed.
Finally, there is an option for a business to apply for Currently Not Collectible status. This is a temporary reprieve, but it prevents any collection efforts and pauses the obligation to pay the penalty. The IRS will only agree to these terms when paying the penalty would result in the business being unable to cover necessary expenses like payroll or rent. This status only remains in place until payments once again become a realistic possibility.
When tax obligations to the IRS are missed, the consequences can add up quickly, and a TFRP could eventually lead to criminal exposure if it is not addressed. Thankfully, a Fairfax trust fund recovery penalty lawyer could resolve these issues on your behalf by working out repayment plans or other options. We can even assist you in pushing back on the IRS’ attempt to reclassify your contracted workers as employees.
Do not risk a tax lien or tax levy on your business because you ignored collection notices. Reach out right away to discuss your case during a private 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, Fairfax, 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.
