What To Expect If You're Still In Business With Payroll Tax Problems
If you're still in business, and you go a few successive quarters of not paying payroll tax, the IRS will begin mailing you notices demanding payment of the undeposited taxes, plus interest and penalties. If the taxes aren’t paid in full, including penalties and interest, the IRS will move to determine what persons in the company are responsible. At this point, you may be fully aware of the situation and know that you are responsible.
However, that may not be the case...This is a critical time to develop your case if you feel you should NOT be held liable. For instance, say your partner is in charge of paying payroll but neglected to do so, and you really had no idea anything was wrong. You MUST do everything you can at this point to take the IRS attention AWAY from you.
Even in this is true, the IRS may attempt to make a case against you, especially if it is found that you have personal assets – and the guy who didn’t pay the payroll doesn’t. It’s not fair, I know but keep in mind that the IRS’s primary interest is to get paid. If you don’t protect yourself, you could find yourself on the hook the tax.
If the IRS does decide you are liable, and serves you a Letter 1153 - Notice of Proposed Assessment, you (and your Certified Professional) have only 60 days to prepare your case against a well-armed IRS. If you fail to file within 60 days, it’s too late.
So, the best defense against being served a Letter 1153 - Notice of Proposed Assessment is to not be served one in the first place. And, if you wait until AFTER you’ve been served to begin preparing your defense, you put yourself (and your Certified Professional) in a very weak position. By this point, the IRS has been building a case against you for months.
In the hunt to determine who is responsible, the IRS Revenue Officer will begin conducting “4180 Interviews” with people they consider potentially responsible (the 4180 is the form the Revenue Officer is required to complete while conducting the interview).
Two big reasons you should not attend a 4180 Interview without having your Attorney present:
1) At the end of the interview, the Revenue Officer will require you to sign the 4180 form under penalties of perjury. The last thing you want to do is unwittingly open yourself up to a criminal perjury prosecution by saying something inaccurate.
2) The purpose of this interview is to use anything you say against you to determine if you are responsible. Remember – the IRS wants to peg as many people as possible as responsible, because it increases the chance they will collect the penalty.
IRS Revenue Officers are very crafty at getting people to say things they can hold against them later. Remember - the job of the IRS Revenue Officer in this interview is to identify YOU as a target, and to get you to identify OTHERS as targets. Having a Tax Professional present during this interview will help keep you from saying something that could put you in danger.
However, that may not be the case...This is a critical time to develop your case if you feel you should NOT be held liable. For instance, say your partner is in charge of paying payroll but neglected to do so, and you really had no idea anything was wrong. You MUST do everything you can at this point to take the IRS attention AWAY from you.
Even in this is true, the IRS may attempt to make a case against you, especially if it is found that you have personal assets – and the guy who didn’t pay the payroll doesn’t. It’s not fair, I know but keep in mind that the IRS’s primary interest is to get paid. If you don’t protect yourself, you could find yourself on the hook the tax.
If the IRS does decide you are liable, and serves you a Letter 1153 - Notice of Proposed Assessment, you (and your Certified Professional) have only 60 days to prepare your case against a well-armed IRS. If you fail to file within 60 days, it’s too late.
So, the best defense against being served a Letter 1153 - Notice of Proposed Assessment is to not be served one in the first place. And, if you wait until AFTER you’ve been served to begin preparing your defense, you put yourself (and your Certified Professional) in a very weak position. By this point, the IRS has been building a case against you for months.
In the hunt to determine who is responsible, the IRS Revenue Officer will begin conducting “4180 Interviews” with people they consider potentially responsible (the 4180 is the form the Revenue Officer is required to complete while conducting the interview).
Two big reasons you should not attend a 4180 Interview without having your Attorney present:
1) At the end of the interview, the Revenue Officer will require you to sign the 4180 form under penalties of perjury. The last thing you want to do is unwittingly open yourself up to a criminal perjury prosecution by saying something inaccurate.
2) The purpose of this interview is to use anything you say against you to determine if you are responsible. Remember – the IRS wants to peg as many people as possible as responsible, because it increases the chance they will collect the penalty.
IRS Revenue Officers are very crafty at getting people to say things they can hold against them later. Remember - the job of the IRS Revenue Officer in this interview is to identify YOU as a target, and to get you to identify OTHERS as targets. Having a Tax Professional present during this interview will help keep you from saying something that could put you in danger.
