It happens every day: smart, motivated people escape the corporate grind by starting their own businesses. Unfortunately for many of them, their ventures don't turn profits quickly enough. Under pressure to keep their enterprises alive, some will consider various means of avoiding payroll taxes or hanging on to taxes withheld from employees rather than remitting them to the Internal Revenue Service.
Dangers lurk in both directions, the IRS tells business owners. Employers who willfully fail to comply with employment tax laws face the possibilities of civil penalties and even criminal charges.
Many employers routinely use independent contractors to provide services to their customers. Businesses using contractors can include those in construction, nursing, trucking, security, cable installation, temp agencies, catering, landscaping and others.
However, there are some employers – in those businesses and others – that misclassify employees as contractors. The misclassification, whether intentional or not, can enable the business to avoid withholding and remitting federal employment taxes. If and when the IRS discovers the misclassification, the employer can be required to pay back taxes and penalties, and can in some cases face criminal sanctions as well.
There can be other problems for employers engaged in misclassification, including legal claims that you failed to pay overtime or minimum wage, as well as sanctions by state tax collectors and the federal government’s Department of Labor.
An experienced tax attorney is available to discuss the circumstances of your payroll tax issues and how the problems can be resolved. Whether you are looking for tax attorneys in Chicago or tax attorneys in Cleveland, or anywhere in the country for that matter, we can help you. Contact us today.