Settle Payroll Liability / 941
Resolve Your Payroll Challenges: Efficient 941 Settlement Solutions Await.
Settle Payroll Liability
Hire our experienced team of tax professionals to settle your tax case
The Process of receiving a Payroll Tax Settlement
Dreis Tax Services will want to fully review your company or corporation before you can obtain a payroll tax settlement. You will need to provide Dreis with the current financial statement along with proof that all payroll tax deposits and 941 tax forms have been filed.
Many times, Dreis Tax Services will want a personal or individual financial statement for more responsible persons. For most companies, Dreis’s payroll tax settlement may come in three forms.
Upon reviewing your current financial statement, Dreis may determine that you are a hardship candidate, monthly payment agreement candidate, or an offer in compromise candidate for a payroll settlement.
THERE ARE THREE TYPES OF RELIEF FROM JOINT AND SEVERAL LIABILITY FOR SPOUSES WHO FILED JOINT RETURNS:
There are different kinds of relief available to you if your spouse or former spouse has caused additional tax liability:
- Innocent Spouse Relief: This gives you relief from extra tax you owe if your spouse or former spouse failed to report income, reported it improperly, or claimed improper deductions or credits.
- Separation of Liability Relief: This offers the division of additional tax owed between you and your former spouse or your current spouse if you’re separated, due to an incorrect report on a joint return. The portion of tax allocated to you is what you’re responsible for.
- Equitable Relief: If you don’t qualify for innocent spouse relief or separation of liability relief due to an incorrect report on a joint return, generally attributed to your spouse, you might qualify for equitable relief. This relief may also apply if the correct amount of tax was reported on your joint return but remains unpaid.
Please keep in mind:
You must request innocent spouse relief or separation of liability relief within 2 years after the date the IRS first tried to collect the tax from you. For equitable relief, you must request it within the time the IRS has to collect the tax.
If you seek a refund of tax you paid, your request must be made within the general refund period, usually three years after the date the return is filed or two years following the payment of the tax, whichever comes later.
Settle Payroll Liability / 941
Why have Brian Dreis, tax professional contact the IRS:
- You never have to talk with the Internal Revenue Service on these tax matters;
- Dreis Tax Services knows what the IRS is looking for;
- Dreis Tax Services knows the exact packaging required;
- Dreis Tax Services knows the next steps the IRS will take;
- You know your case will be handled and resolved as fast as possible.
Other Factors To Consider
- Dreis Tax Services warns that the IRS has the right to sell your complete inventory at public auction;
- Dreis Tax Services informs you that the IRS can seize all your accounts receivables;
- Dreis Tax Services highlights that the IRS can hold you personally responsible for this tax;
- Dreis Tax Services cautions that the IRS has the right to lock the doors of your business.
Steps to take to work out an affordable payment plan with the Internal Revenue Service:
- Dreis Tax Services advises you to immediately stay current on all payroll tax deposits to show the IRS good faith;
- Dreis Tax Services emphasizes the need to be prepared to give the IRS a current financial statement;
- Dreis Tax Services recommends making sure your personal tax liabilities are filed and paid;
- Dreis Tax Services suggests having all documentation on the financial statement prepared for the IRS.
If you do not pay your Payroll Taxes, Dreis Tax Services warns that the IRS can collect them from you individually. To encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for the TFRP (trust fund recovery penalty).
Dreis Tax Services highlights that these payroll taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount.
Dreis Tax Services notes that the TFRP may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business.
Dreis Tax Services emphasizes that the business does not have to have stopped operating in order for the TFRP to be assessed.
Who Can Be Responsible for the TFRP, according to Dreis Tax Services?
The TFRP may be assessed against any person who:
- Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and
- Willfully fails to collect or pay them.
A responsible person is a person or group of people who have the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes. This person may be:
- An officer or an employee of a corporation,
- A member or employee of a partnership,
- A corporate director or shareholder,
- A member of a board of trustees of a nonprofit organization,
- Another person with authority and control over funds to direct their disbursement,
- Another corporation or third-party payer,
- Payroll Service Providers (PSP) ore responsible parties within a PSP
- Professional Employer Organizations (PEO) or responsible parties within a PEO, or
- Responsible parties within the common law employer (client of PSP/PEO).
For willfulness to exist, the responsible person:
Dreis Tax Services highlights that a person must have been, or should have been, aware of the outstanding taxes and either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required).
According to Dreis Tax Services, using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of willfulness. You will be asked to complete an interview in order to determine the full scope of your duties and responsibilities.
Dreis Tax Services explains that responsibility is based on whether an individual exercised independent judgment with respect to the financial affairs of the business.
Dreis Tax Services further clarifies that an employee is not a responsible person if the employee’s function was solely to pay the bills as directed by a superior, rather than to determine which creditors would or would not be paid.
Figuring the Trust Fund Amount, according to Dreis Tax Services.
The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on:
According to Dreis Tax Services, the trust fund recovery penalty consists of:
- The unpaid income taxes withheld, plus
- The employee’s portion of the withheld FICA taxes.
For collected taxes, Dreis Tax Services notes that the penalty is based on the unpaid amount of collected excise taxes.
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