Unfiled or unpaid business or payroll taxes can create serious problems. Depending on how the business is set up, the IRS can and will pursue the owners or managers personally for the employee share of the taxes withheld by the company and not sent to the government. Even the company bookkeeper can be held personally responsible for unpaid payroll taxes. These are called “Trust Fund Recovery Penalties” and can never be discharged in bankruptcy. If a company has received notices from the IRS regarding:
- Delinquent 941 quarterly returns;
- Delinquent 940 annual returns;
- Notices regarding payroll taxes owed;
Immediate action must be taken. The IRS has the power to shut down a business and seize both business and personal assets to pay back taxes. Ignoring IRS Notices is the worst thing a business can do. The IRS has the power to levy bank accounts, seize receivables from customers, and place liens on business and personal assets. Communication with the IRS is essential to avoid such drastic collection action.