WEBEL LAW, PLLC
535 Fifth Avenue, Floor 4
New York, New York 10017
(646) 373-1055

UNPAID EMPLOYMENT AND INCOME TAX WITHOLDINGS? THIS IS SERIOUS

December 1, 2022

If you're an employer, you're required by federal law to withhold from employees’ pay and remit to the IRS certain amounts for income tax and employment taxes (social security and Medicare taxes) along with the applicable forms (Forms 941, 943, or 944). Failing to remit can cost you significant money under the Trust Fund Recovery Penalty (TFRP).

Via the Trust Fund Recovery Penalty, the IRS extends the risk for non-compliance beyond the employer and those responsible for collecting and remitting payments. Therefore, legal entities that grant limited liability to protect owners from personal liability don't extend to protect those responsible for remitting an employee's portion of employment taxes and income tax withholdings.

If you're deemed a responsible party as defined by the Internal Revenue Code, the IRS may go after you to collect up to 100 percent of funds owed on an employee's behalf. Furthermore, failing to pay the taxes owed may even rise further than a mere civil penalty to being criminal. The IRS takes tax crimes very seriously and pursues responsible persons.

If you fear that the IRS may look at you as a person who's responsible for remitting an employee's share of employment taxes or an employee's income tax withholding, it's time to “lawyer up” with a Tax Attorney. Call us now.