Federal law requires employers to withhold taxes from the paychecks of their employees. Some common examples include income, Medicare, and Social Security taxes. Employers temporarily hold these funds in trust before it forwards the money to the federal government.
The failure to abide by federal regulations and remit these funds could result in an IRS investigation. Flagrant violations could also lead to criminal consequences against the business owner. A dedicated tax lawyer could help ease these penalties or even avoid them entirely. You could learn more about your options during a private discussion with a Vienna trust fund recovery penalty lawyer.
Employees must have a portion of their income withheld to satisfy employment taxation requirements. While these taxes are paid by employees as well as the employer, the federal government places the burden of collecting and holding this tax revenue solely on the employer. With each paycheck, employers are required to withhold a percentage of the income paid to their workers. These employment taxes must then be held in trust by the employer and later remitted to the IRS.
In addition to the requirement to hold these funds in trust, there are also rules regarding quarterly and annual reporting. Certain forms must be completed by the employer to remain in compliance.
There are consequences that can come with the failure to comply with these requirements. If the IRS believes a violation has occurred, it could initiate an investigation. Punishments usually involve penalties on the employer, but in rare, egregious cases, this could result in the closure of a business and the liquidation of its assets to provide for the missing money in the trust. A trust fund recovery penalty attorney in Vienna could work with an employer to properly remit the taxes and provide necessary reports before a penalty is accrued. In addition, a lawyer could clarify that a person who was subject to the penalty was not in fact the person responsible for remitting the trust funds.
When the IRS determines there has been a trust fund violation, it has the power to act not only against a business, but also its owner and other responsible parties. Once this penalty is assessed, the IRS has the right to pursue the full balance of the trust fund from the business and the owner individually. This often involves the use of levies and liens to collect the shortfall.
It is possible to work out collection alternatives with the help of a Vienna trust fund recovery penalty attorney. To do so, a business owner must meet certain conditions. First, the IRS will only consider collection alternatives if the business has filed all its employment and income tax returns and made the related payments for the current quarter.
The IRS will consider requests to release liens and levies when they cause immediate economic hardship. They could also consider collection alternatives suggested by the owner and their attorney.
If you are facing the possibility of trust fund recovery penalties, you are under no obligation to face this challenge on your own. The penalties that the IRS can dispense on your business can quickly add up. A Vienna trust fund recovery penalty lawyer could advise you of how you can resolve your tax dispute. To learn more about how the right attorney could help, call us for a confidential 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.