TAX SECRET #3

PAYROLL TAXES NOT BEING PAID ON TIME

[WARNING:  All check signers on company Bank accounts

can be held responsible for payroll taxes!]

If you are a check signer on the company checking account, it is your responsibility to make sure all payroll taxes are paid to the IRS monthly.

Sometimes businesses get behind on the payroll taxes due to cash flow problems. The penalties and interest assessed by the IRS are excessive for this type of delinquency. These problems worsen with IRS penalties and interest, and the total amount owed can grow by 50% to 75% in a short period of time. If the Company is in cash flow trouble or is approaching the DANGER ZONE, it may never be able to pay off the total amount owing. Each check signer listed on the bank signature card is responsible for the tax; this often includes spouses, secretaries, employees, relatives, office managers or yourself.

HEADS UP:  You should get all non-essential check signers deleted from the bank signature cards before the company gets into trouble.

The IRS takes a very serious approach to collecting delinquent payroll taxes and may levy or seize company assets in short order. The best advice I can give to you if you find yourself in this situation is, DO NOT meet with the IRS Revenue Officer who calls or comes to the door to collect these taxes. Often, how you answer the first 5-10 questions they may ask you will determine whether you stay in business and if you or others will become personally responsible for the payroll taxes. One of the most important services we offer our clients is to meet with the IRS officers ourselves. This allows our clients to continue concentrating on running their business and improving the cash flow.

In my experience, I rarely have seen a good outcome when the Client meets with the IRS Revenue Officer.