Immense IRS Issues Connected with Delinquent Payroll Taxes – Part One

I’m guessing you already know this, but paying employees means payroll taxes. As their employer, you are required by law to withhold those taxes from paychecks. Your employees are counting on you to forward that money to the IRS.

And let’s be real – the IRS is totally expecting you to pay up on time. They do not play around when it comes to payroll taxes.

If you let payroll tax payments slide for a year or more, you’ve poked the lion. The IRS will likely hit you with criminal charges for tax evasion. In their view, you’ve basically stolen money held in trust for them.

So do yourself a favor and pay on time. Don’t poke this lion.

IRS Deadlines

The IRS has strict, non-negotiable due dates for payroll tax deposits. I know, it’s a total drag. But you don’t want to mess with them on this.

If you owe $1,000 or less in payroll taxes, you mail Form 941 quarterly by:

• April 30
• July 31
• October 31
• January 31

Paying $50,000 or less in total payroll taxes last year? Then you gotta file Form 941 monthly to report what you owe.

More than $50k last year? Form 941 is due twice every month, within 4 days after running payroll.

You also have to pay electronically through the IRS system by those dates.

No excuses, no exceptions. I don’t make the rules, the IRS does.

Delinquency Notices

Say you don’t pay on time. Those scary IRS letters will show up fast.

You filed Form 941 but didn’t pay what you owed? The IRS sends a bill for the taxes, plus penalties and interest. Not cool.

Didn’t even file Form 941? Then the IRS sends a bill with their best guess for what you owe. You really don’t want that.

Get two bills and still don’t pay? The IRS collections crew revs up their enforcement engine. This is bad news.

Legally, they can grab business assets, bank balances, inventory, and incoming payments to your customers.

Payroll Tax Due Dates

Let me break down when payroll taxes are due:

Owe less than $1k? Send that Form 941 every quarter:

• January 31
• April 30
• July 31
• October 31

Paid $50k or less in total payroll taxes last year? File monthly.

More than $50k last year? You file twice every month, within 4 days of running payroll.

No flexibility on the dates. Mark them on your calendar in permanent ink!

Filing Form 941

You report what you owe on Form 941:

• $1k or less quarterly? File by the dates above.
• $50k or less last year? Monthly filings for you.
• Over $50k last year? Twice monthly it is.

Make sure to file even if you can’t pay. Don’t add late filing fees to your troubles!

Trust Fund Recovery Penalty

If you come up short on trust fund taxes, the IRS can hit you with a 100% penalty:

• Employee income tax withheld
• Employee Social Security and Medicare tax

This makes your responsible executives personally liable. Not the business, but you personally. Ouch!

Criminal Charges

If the IRS thinks you deliberately evaded payroll taxes, you may face criminal charges:

• Felony tax evasion – 5 years in prison, $250k fine
• Misdemeanor failure to pay – 1 year in prison, $100k fine

Do yourself a favor and avoid this nightmare scenario! Just pay on time.

Final Thoughts

You must pay payroll taxes on the IRS schedule, no exceptions. Late payment means huge penalties for your business and personally for you.

Do yourself a favor and pay on time! Don’t poke this lion.