The payroll tax is probably one of the most onerous tax provisions in the law. In simple terms, an individual or corporation, or the other authorized representative, may be held liable for any unpaid payroll taxes after all applicable deductions and before the due date. This provision is often referred to as the payroll tax penalty provision because the penalty assessed against the employer or the corporation is equal to 100% of the total payroll tax liability. This means that the employer will have no money left over after taking his or her proportionate share of taxes. This, in turn, makes it very difficult to negotiate with the IRS in an attempt to compromise the total amount of taxes owing.
A great deal of time and money are lost whenever the IRS attempts to collect the outstanding amounts of unpaid payroll taxes by individual employees, small businesses, and large corporations alike. This situation can result in strained financial resources for many organizations and, in extreme cases, the loss of business. In order to protect the financial stability of their operations, many small businesses are forced to seek out alternative methods of collection. Unpaid employment taxes are one such method. When faced with the possibility of having to repay large amounts of federal taxes by individual workers, small businesses must seek employment of an attorney, accountant, or tax preparer to ensure compliance with laws and regulations and the timely tax debt resolution issues.
Not every small business owner or employee is aware of the rights and remedies available to resolve their unpaid payroll taxes. Some small business owners and employees are not even aware that they can seek recourse with the IRS before a judgment is issued and levied. The IRS alone has the authority to issue collection efforts for unpaid payroll taxes owed. While many tax professionals advise their clients to attempt to work out collection efforts with the IRS themselves, this is only an option that is available to those who know how. The IRS has been known to refuse to work with taxpayers when no reasonably satisfactory settlement has been reached, even in cases where a taxpayer is clearly in default of their payment responsibilities.
An irate former client is not the only cause for concern when one considers the potential for hefty judgments for late payment penalties. There are also other collection options available to taxpayers if they do not receive an acceptable settlement from the IRS. In addition to pursuing collections in state court, the IRS may elect to levy a civil penalty up to $6,000 for each day that the delinquent taxpayer remains in default of their obligation. In certain circumstances, the IRS may also elect to have a tax lien placed against a property in order to recoup unpaid payroll taxes.
Though taxpayers may not be directly liable for a lien, it is possible for a judgment to be returned to the estate of an individual who is responsible for the unpaid payroll taxes. If the judgment is returned to the Estate of the responsible party, the estate is required to immediately pay off the liability. If the responsible party does not have sufficient assets to cover the judgment's recovery, then the IRS may elect to place a deficiency judgment against the Estate of the responsible party and then proceed with collection of the debt from the Estate. The Estate is not legally held responsible for amounts due or owing from a deficiency judgment, visit this page that has elaborated more about taxes.
Another method that may be available to taxpayers when they are unable to resolve their issues with the IRS involves the establishment of an estate executor. The purpose of this individual is to represent the estates of deceased taxpayers in estate planning and other legal proceedings. In some cases, taxpayers may be able to settle their unpaid back payroll taxes through the back payroll taxes owed to the government without hiring an estate executor. An estate executor can be a legal representative of a deceased person, or he or she may simply act as the representative of an estate. In any case, taxpayers who owe back payroll taxes must seek alternative methods of resolution, such as working with an experienced tax specialist. You can get more enlightened on this topic by reading here: https://en.wikipedia.org/wiki/Income_tax.