Federal and state governments have numerous programs that provide aid to retired, unemployed and disabled workers. Programs like Social Security, Social Security disability and Medicare are funded in part by employee payroll taxes. To ensure for the continued funding of these trust programs, employers are required to withhold and pay payroll taxes for all employee. Employers who fail to comply with payroll tax laws can face significant penalties including costly fines and even criminal charges.
There have been numerous criminal IRS cases in which an employer was alleged to have knowingly and intentionally failed to pay payroll taxes. These individuals are often forced to pay punitive penalties and may even be subject to criminal tax evasion charges even if they did not intentionally commit tax fraud.
Even in cases where an accountant or another employee committed payroll fraud and an employer had no knowledge that payroll taxes weren't being paid, the IRS will go after anyone within or affiliated with a company that it deems to be a "responsible person." The IRS defines a responsible person as being "a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes."
Based upon this definition, not only may the individual or individuals who directed or engaged in payroll fraud activities be held liable, but so too may those individuals who hold any of the following positions within or related to a company, including:
• Company officer
• Company employee
• Board member
• Shareholder
• Payroll providers
In cases where the IRS discovers that payroll taxes have not been paid, the agency will actively seek to recover the unpaid taxes, along with penalties and fines, from anyone it believes was or "should have been, aware of the outstanding taxes."
If you would like to speak with an attorney regarding your taxes:
