What happens when an employer doesn't send in full taxes from a paycheck?

Question

I am concerned of what would happen if an employer says they are deducting $X of taxes from a paycheck each week but doesn't actually send in as much as they claim to the government. Does the employee then owe money come tax time? What if they were taken advantage of without their knowledge? For example: Their paycheck was stiffed each week and then they end up owing even more to the government? Would the employee be held responsible for that missing money?

Furthermore, even if it IS the employer's fault, I have heard that employees are held responsible because they are essentially the ones who are in charge of paying. How would an employee even know if taxes aren't being paid in their name? How could one double check throughout the year/around tax time?

Also, the paystubs would be handwritten each week. It is a small business with no accountant. Would those be legit if I had a dispute with my W2?

Answer 1

Both the IRS ( www.irs.gov ) and the Dept of Labor ( www.dol.gov ) can be your allies in this situation. They will take action against the employer for not paying the taxes that the business owes on behalf of the employee.

You should keep your paystubs showing what was deducted. If there are no deductions shown, contact the IRS and the DOL immediately.

Answer 2

First, the IRS does NOT come after the employees in this situation. They do go after the employer. I suggest that you look for new employment and if you separate from the employer, call a local office and ask to be put through to a Revenue Officer group. Do keep good records of your pay in case the employer fails to file a W-2. You can file a tax return with a substitute W-2, but you need to hire a good tax pro if you go that route.

Answer 3

It's a good idea to hang onto your paystubs if you have doubts about the honesty of your employer. That way, if your W-2 doesn't show what was really deducted, you'd have proof that the deductions were made. You wouldn't be responsible for paying again the amount that was actually withheld. The IRS takes a very dim view of employers who withhold taxes and then don't submit them when they're supposed to - the employer would be in MAJOR trouble with the IRS.

Answer 4

According to the IRS the employee does not owe any money. If the employer withheld the money they go after the employer, not the employee. It happens all of the time with employers that are in financial difficulty.
You as the employee have no worries except you must keep your check stubs, something you should do anyway.

Answer 5

that depends on your w4 & if your earnings.

taxes won't be taken out if you make a small amount (ie married-1 with a paycheck = $36, no taxes will be taken out) but you may end up paying them at the end of the year based on your annual income (full time & part time jobs)

or you may get a 1099 in which case, you'll pay for the taxes

Answer 6

No, the enterprise is merely required to pay the worker what he/she labored. until you're on some settlement which you and the enterprise signed that suggested that any given day no remember the hours you artwork, you will a minimum of be payed for 4 hours. in any different case, there may well be no think approximately sending you domicile to keep them funds.