Many business owners, CFOs, and other persons with authority over payroll, are unaware that failing to properly withhold and deposit payroll taxes for their employees can result in the imposition of personal liability equal to 100% of the uncollected payroll tax deficiency known as the “trust fund recovery penalty.”
Victims of recent severe storms and flooding in numerous states have more time to make tax payments and file returns if they are affected taxpayers in counties that have been designated as federal disaster areas qualifying for individual assistance. Certain other time-sensitive acts also are postponed. The IRS has recently announced on its website that additional areas in Virginia have been designated as federal disaster areas qualifying for individual assistance.
When you owe money to the IRS, penalties and interest can add up, and eventually, the IRS can collect the money you owe with forced collection actions such as liens, levies, wage garnishments and asset seizures. If you owe back taxes, it’s best to pay the IRS as soon as possible or work out a suitable payment arrangement. Several different payment arrangements are available if you qualify (for example, the Offer in Compromise, Installment Agreement and Currently Non-Collectible Status), and by far the most common of these is the Installment Agreement.
When you owe money to the IRS, penalties and interest can add up, and eventually, the IRS can collect the money you owe with forced collection actions such as liens, levies, wage garnishments and asset seizures. It’s best to pay the IRS as soon as possible or work out a payment arrangement with the IRS. Several collection alternatives are available if you qualify.
This is the unfortunate case of John Spottiswood and Nancy Miyasaki, a married couple seeking an abatement and refund of penalties they paid for late filing their return and late payment their 2012 income taxes. While this decision coming out of the U.S. District Court for the Northern District of California will make all taxpayers a little nervous, it should scare the bejeezus out of tax return preparers. It serves as an example of how liability for tax return preparation and filing in general, has subtly shifted from taxpayers to the preparers with the proliferation of electronic tax return filing.
As you might expect, I receive a ton of questions every day about how the new tax law is going to affect individual, business, trust and estate planning. And, as you might expect, my answer is always quite lawyerly - it depends.