As a tax and probate attorney in New Orleans, Paul Grego has seen businesses make all types of mistakes when it comes to their taxes and bills. By the time they come to the Law Office of Paul A. Grego looking for help, many have already dug themselves into enormous holes. Nonetheless, Grego says that it is his job to help businesses of all sizes find a way out. No matter what the tax predicament, Grego can almost always find a way to lessen the financial impact.
There is one tax mistake, however, that Grego says is the most common among business owners he works with and also the most damaging. That is making the mistake of not making payroll tax payments to the IRS on time and in full. According to Grego, failing to pay payroll taxes as a business owner is a mistake that the federal government takes very seriously.
In fact, Grego says he has never seen the IRS go after anyone as aggressively as it goes after business owners who fail to pay their payroll taxes. Whether that is because of an internal policy within the IRS is unknown, but Grego says it comes down to the importance of business owners remembering that the IRS does not take kindly to people not paying any type of taxes.
Because of these circumstances, Grego says that payroll tax cases are actually the hardest types to resolve. When companies do not pay their payroll taxes in full or on time, the IRS will actually come in and physically padlock their doors. They will take over bank accounts, seize assets, and essentially put these companies out of business.
Something interesting (or unfortunate) to note is that most business owners who fail to pay their payroll taxes are not acting maliciously. Although there may be some people who are outright cheating the government out of money, that is not the typical case. What is more common is that a company’s revenue will suffer—for whatever reason—and the company will have to start cutting back financially. So sometimes companies just do not have enough money in the bank to pay their payroll taxes when they are due.
With the economy as it is right now, Grego says that this has become a bigger issue than ever before. Many business owners are being forced to choose between keeping their doors open and keeping employees employed, and paying payroll taxes. What they oftentimes do not realize, however, is that if they do not pay those taxes, then the IRS will shut them down anyway.
Although there is room for negotiation with most lenders, Grego explains that even an experienced tax attorney will have trouble negotiating with the IRS when it comes to payroll taxes. He therefore recommends that anyone who is struggling to afford to pay payroll taxes get in contact with a financial professional and seek help before it is too late.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.