If you’re struggling with payroll tax problems, you’re not alone. Many business owners find themselves in trouble with the IRS over unpaid or mismanaged payroll taxes. The good news is, there are ways to address these issues and avoid severe consequences. At Rappaport Tax Relief, we specialize in helping businesses like yours resolve payroll tax disputes and get back on track.

Understanding the Problem

Payroll taxes are non-negotiable. The IRS expects employers to withhold taxes from employees’ wages and remit them on time. If you’ve missed deposits, failed to file tax returns, or misclassified employees, the IRS will take notice. Ignoring these issues only makes matters worse, as penalties and interest compound daily.

The most common payroll tax problems include:

  • Unpaid Payroll Taxes: Funds withheld but not remitted to the IRS.
  • Late or Missed Filings: Failure to file IRS Form 941 or similar returns.
  • Trust Fund Recovery Penalty (TFRP): Personal liability for unpaid taxes.

If you’ve already received notices or demands from the IRS, it’s critical to act immediately to avoid escalated enforcement actions.

What Happens If You Don’t Act

Failing to resolve payroll tax issues can lead to serious consequences:

  • Substantial Penalties: The IRS charges penalties for late payments, missed deposits, and underpayments.
  • Interest Accrual: Interest on unpaid taxes can quickly turn a manageable debt into a financial crisis.
  • Asset Seizure: The IRS has the authority to levy bank accounts, garnish wages, and seize property to recover unpaid taxes.
  • Personal Liability: Under the Trust Fund Recovery Penalty, the IRS can target your personal assets if it determines you were responsible for payroll tax compliance.

How to Get Back on Track

The longer you wait, the harder it becomes to resolve payroll tax issues. Here’s what you can do now:

Assess the Situation

Review all IRS notices, payroll tax filings, and payment records to understand the scope of the problem. If you’re unsure about the details, working with a professional can help clarify what needs immediate attention.

Communicate with the IRS

Avoiding IRS correspondence is a mistake. Respond promptly to any notices and, if necessary, request additional time to gather information or prepare a plan.

Set Up a Payment Plan

If you owe back taxes, the IRS may allow you to establish an installment agreement to pay the debt over time. An experienced tax professional can negotiate favorable terms on your behalf.

Address Compliance Gaps

If you’ve misclassified employees, missed filings, or made calculation errors, these issues need to be corrected immediately to prevent further penalties.

Consider an Offer in Compromise

For those who cannot pay the full amount owed, an Offer in Compromise (OIC) may allow you to settle for less than the total debt. This option requires careful preparation to demonstrate your inability to pay.

How Rappaport Tax Relief Can Help

Payroll tax issues don’t resolve themselves, and navigating IRS rules alone can feel overwhelming. At Rappaport Tax Relief, we’ve helped countless business owners:

  • Stop IRS enforcement actions like levies and liens.
  • Negotiate payment plans that fit their financial situations.
  • Reduce penalties through abatement requests.
  • Resolve Trust Fund Recovery Penalty cases to protect personal assets.

We understand what’s at stake and have the experience needed to guide you through the process.

Take the First Step

If payroll tax issues are threatening your business, don’t wait for the situation to escalate further. 

Call David Rappaport with Rappaport Tax Relief today at (917) 488-8295 to schedule a free consultation. 

Let us help you regain control and protect what you’ve worked so hard to build.