Solutions

At Clarity Tax Resolutions, we leverage our combined 15+ years of firsthand IRS experience to guide you through the complexities of payroll tax settlements. Our expert team, which includes former IRS managers, agents, Board Certified Tax Attorneys, and CPAs, possesses deep knowledge of IRS systems, settlement procedures, and strategies for achieving reasonable tax debt relief, including issues with trust fund debt.

The IRS prioritizes payroll taxes because they are held in trust for employees. If these taxes are not paid, the IRS may use aggressive collection tactics, including asset seizure and federal tax lien filings. Under Section 6672 of the Internal Revenue Code, the IRS can also hold individuals personally liable.

Our payroll tax settlement process includes:

• Evaluation: The IRS will review your business’s financial statements, payroll tax deposits, and 941 tax forms.
• Personal Financial Statements: The IRS may request these from responsible individuals.
• Settlement Options: Depending on your financial situation, the IRS may offer:
  • • Hardship status.
    • Monthly payment agreements.
    • Offer in Compromise.

• Stay Current: Ensure all payroll tax deposits are up-to-date to show good faith.
• Financial Records: Prepare an up-to-date financial statement for the IRS.
• Personal Tax Compliance: Ensure all owed personal taxes are filed and paid.
• Complete Documentation: Gather and prepare all necessary documentation.

To encourage prompt payment of withheld taxes, Congress enacted the TFRP, holding responsible parties accountable for unpaid trust fund taxes. The TFRP applies even if the business is still operating and unpaid trust fund taxes cannot be collected from the business.
Responsible Person: Anyone with authority and control over trust fund tax collection, accounting, and payment, including:

• Corporate officers or employees.
• Partners or employees of partnerships.
• Corporate directors or shareholders.
• Trustees of nonprofit organizations.
• Professional Employer Organizations (PEOs) or Payroll Service Providers (PSPs).

Willfulness: Demonstrated by using available funds to pay other creditors instead of the IRS.

The penalty equals the unpaid trust fund tax balance, which includes:

• Unpaid income taxes withheld.
• The employee’s portion of withheld FICA taxes.
• Unpaid collected excise taxes.

If the IRS determines you are a responsible person, you will receive a letter explaining the assessment and your appeal rights. You have 60 days (75 days if outside the US) to respond. If you do not respond, the IRS will assess the penalty and take collection action against your personal assets.

Businesses with unpaid payroll taxes are subject to aggressive IRS collection actions because the IRS considers these payments as held in trust for employees. The IRS may levy funds and seize assets if payments are not made. Our skilled tax team can help you negotiate a manageable payment plan and avoid forced collections.

The IRS will investigate the trust fund liability and identify responsible individuals. Those found liable can appeal the findings. After decisions are made, the IRS will pursue personal assets until the debt is settled. Bankruptcy will not discharge this debt, and the IRS will continue collection actions until full payment is made.

For prompt and long-term tax relief, contact Clarity Tax Resolutions for payroll tax settlements. Our experienced team ensures the best possible outcome for your case. Schedule a free consultation today and let us guide you through the complexities of payroll tax obligations.

Benefit from our extensive experience, deep IRS knowledge, and commitment to achieving the best results for our clients. Don’t let payroll tax issues disrupt your business—reach out to us for expert, practical assistance.