CPA Miami _{Certified Public Accountants}

When many businesses start to have financial problems one of the first things that happens is the failure to pay payroll taxes or file its payroll returns on time. This is all too common!

To begin, the IRS will begin by mailing a series of letters reminding taxpayers of the late or delinquent filing of the returns or payroll taxes. Similarly, ridiculously high penalties will begin simultaneously.

When the not-so-friendly reminder letters have no response (as they most often do), the IRS will take more serious actions in the enforcement of this collection. Collection activities generally begin with placing a lien or levy monies from taxpayer’s bank accounts. A levy is where the IRS contacts the taxpayer’s financial institutions and demands the release of monies necessary to satisfy all or a portion of the tax obligations. Your bank accounts are generally frozen until the funds are released.

To the extent there is not enough cash to satisfy the debt, the IRS may also levy business assets including accounts receivable, equipment, automobiles, etc. Just when things are not bad enough, the IRS is contacting your customers demanding payment of taxes. Good luck trying to salvage this business relationship!

When all else fails, the IRS will look beyond the business to any and all individuals that may be responsible for the filing of tax returns or the remittance of payroll taxes. These responsible persons include business owners, and even employees who have financial control over bank accounts and the hiring and firing of employees. It generally does not matter that the business or its owners have filed bankruptcy, or one person is more responsible than another for this obligation. The IRS will seek collection from any and all available sources for the payment of these taxes.