After an IRS audit or review of your company tax return, the IRS may follow up with you about perceived arrears in employment tax payments made on behalf of your workforce. If the IRS notices discrepancies between data provided by workers and their withholding, the IRS may review company records for tax fraud if it appears withholding was not paid for Social Security, Medicare, and federal income taxes.
Tax crime involving failure to pay over withholding taxes is common. Business owners may borrow from withholding to keep a struggling business afloat—or they may use withholding accounts to pay their personal bills. This type of tax fraud is frequently prosecuted by the IRS. Too often, individuals involved in this type of scheme believe the worst that can happen is some kind of business fine from the IRS and possible bankruptcy to discharge debt. Given that, it is important to keep these basic facts in mind about the TFRP:
If the IRS assesses a TFRP, you will receive a letter from the agency giving you 60 days to appeal the decision. Failure to respond to the letter means the payment will be assessed and you will receive a demand for payment from the IRS for the sum owed.
If you know you are in arrears on payroll taxes, do not wait to hear about it from the IRS. Speak with an experienced criminal tax attorney to learn about your options.
The legal team at Robert J. Fedor, Esq., LLC delivers experienced legal representation to clients throughout the U.S. and abroad on matters of tax crime, compliance, or IRS criminal or civil audits. When you have tax questions, call us at 800-579-0997 or contact us. We have offices in Cleveland and Chicago.