A friend of mine owns a small company and got behind on payroll taxes. He entered into an agreement with the IRS to pay monthly. He has kept his agreement for almost a year now without missing a payment.
Now he received a bill to him personally stating that he owes the amount of payroll taxes as an individual. Does he owe the payroll taxes twice? The agreement on behalf of his company includes the payroll taxes.
2007-08-14 09:52:45 · 9 answers · asked by Wes W 1 in Business & Finance ➔ Taxes ➔ United States
The payroll taxes are for his employees only, not for his own income.
2007-08-14 10:05:25 · update #1
No, he does not owe them twice, but if the company does not pay, the irs can go after him personally for the payment. They can go after him as an owner, after board of directors, also anyone who has check signing authority (as they should have paid the taxes). The IRS calls those persons as being a "responsible party".
I have included information about who the irs considers a responsible party.
2007-08-14 09:56:36 · answer #1 · answered by Anonymous · 1⤊ 1⤋
No, the payroll taxes are not owed twice.
If he was a "responsible party" then he is individually liable for the taxes. While the company has an agreement in place and are making payments, the IRS put him on notice as a backup plan. They probably acted so that the statute of limitations didn't expire.
If the company fails to honor their agreement the IRS is now in a position to go after him for the taxes.
2007-08-14 10:00:32 · answer #2 · answered by CPA/PFS 2 · 1⤊ 0⤋
The IRS will hold him personally responsible for the taxes since he is an owner of the company. They will lilkely place liens on his property to secure payment until such time as the debt is paid in full. This is standard practice. He will not be paying twice.
2007-08-14 10:26:57 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
He owes the amount one time, but is personally responsible for it if his company isn't paying it/doesn't pay it. And if the IRS feels he can pay it faster than the company is, they might well take the money from him instead.
Since this is money that was withheld from employees' paychecks and not remitted to the IRS, the IRS doesn't look on it kindly. It could be looked at as similar to theft of money from his employees.
2007-08-14 10:09:04 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
I'd buy the remaining assets, if there are any, but I wouldn't buy the company! Buy the rights to the name and the customer lists for $1.00, but stay away from the company itself. The IRS will get their due eventually. They'll go after the corporate officers and even the bookkeeper for their $$$.
2016-05-17 22:33:52 · answer #5 · answered by ? 3 · 0⤊ 0⤋
did he pay his personal income tax ?? cause he owes on what he deducted from his employees as a company but he also owes could owe on the income he recieved from the company as well
2007-08-14 10:01:35 · answer #6 · answered by Rainy 5 · 0⤊ 2⤋
as others have said he should have his accountant or lawyer revue the document. that said most likely what has happened is that his company ceased doing business(or the IRS has come to believe the business has closed) and the letter is merely to inform the responsible party that the agreement still stands.IRS letters seem to turn normal people into jellyfish.
2007-08-14 10:07:25 · answer #7 · answered by Anonymous · 1⤊ 3⤋
He should get a good CPA or tax attorney to look at it.
2007-08-14 09:56:23 · answer #8 · answered by Anonymous · 0⤊ 1⤋
He should get a tax attorney to review it.
2007-08-14 09:58:06 · answer #9 · answered by Matt 2 · 0⤊ 2⤋