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IRS Problem Resolution

Payroll tax is the IRS's top priority.

Unpaid payroll taxes are the IRS's highest-priority collection category. Trust-fund tax can pierce the corporate veil and become personal liability. We handle these aggressively — the penalties accrue fast.

In short

Payroll tax problems involve unpaid Form 941 (federal withholding + Social Security/Medicare), Form 940 (FUTA), or trust-fund recovery penalty (the withheld-from-employee portion). The trust-fund portion is the urgent piece: the IRS can assess it personally against business owners, signers, and anyone responsible for paying it — bypassing the corporate veil.

The trust-fund recovery penalty

When an employer withholds income tax + Social Security/Medicare from employees, that money is held "in trust" for the IRS until deposited. Failure to deposit it isn't treated like other tax debts — it can be personally assessed against any "responsible person" who willfully failed to pay it. Owners, CFOs, bookkeepers with signing authority can all be on the hook personally.

Resolution paths

  • Catch-up plan — get current on deposits + file all missing 941/940 returns
  • Installment agreement — payroll-tax installment agreements are stricter than income-tax ones
  • OIC — possible but rare for trust-fund cases
  • Trust-fund interview — defend against personal-liability assessment (Form 4180 interview)

If the business is closed

Closing the business does not eliminate the trust-fund liability — it follows the responsible persons personally. We negotiate personal-liability resolution separately from the business case.

FAQ

Questions we hear about payroll tax problems.

I'm a bookkeeper with check-signing authority. Am I at risk?
Potentially yes. The "responsible person" test looks at authority over financial decisions, not just ownership. Anyone who could have paid the trust-fund tax and didn't can be assessed personally. Get representation before any IRS interview.

Ready for a straight answer on your taxes?
Start with a free consultation.

Call, email, or book online. We respond within one business day — every time.

(561) 278-1199

KDM Accounting

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