The Importance of Paying Payroll Taxes
Today we received the sad news that a client was going to have to close their doors. The reason was that the financial pressures were too much and they couldn’t raise the capital to stay afloat. Over the years we have built a great rapport with this client and it is very sad that this is the end of our professional relationship. That said; there is a lesson in this story that I hope can serve as a cautionary tale for someone reading.
The Client had decided to try to keep things going by choosing not to pay their payroll taxes. And because diesel prices are rising and rates are falling, many small trucking companies may consider doing the same. While this may seem like a simple solution to save some money, it most likely will tank your trucking company.
As far as the IRS is concerned, there is no excuse for not paying payroll taxes. As a business owner, not meeting this responsibility is one of the worst things you could do. Not only is it stealing from the government, but also from your employees.
Not Paying Payroll Taxes
If you do not pay your payroll taxes on time, the IRS can charge extra penalties and interest. Also, if you purposefully avoid paying payroll taxes, it could lead to criminal charges punishable by up to a $10,000 fine or five years in prison.
Other actions that the IRS can take are levies and liens. A levy is when the IRS seizes property to meet a tax debt. This can include taking money from a bank account, garnishing wages, and seizing vehicles or other personal property.
Payment Plans
The IRS understands that sometimes things happen that impact your ability to pay on time. A payment plan extends your payment deadline to give you more time. Learn more about the IRS collection process here.
If you need help creating a payment plan, you can use a CPA or a tax attorney. They can also help you get a subordination agreement if needed, allowing you to continue to receive funding from your finance company.
For tips on how to prevent IRS audits and penalties, check out this article where I explain the best ways to stay organized with your record keeping. →
[form id="8639" /]