If the alternative rock band Radiohead was working for you and you were delinquent on their payroll taxes, they might ask you to not leave them High and Dry! It’s a slippery slope to gain your footing if you’re the employee ultimately held responsible for the unpaid taxes.
For your own business’ sake, it’s better to get a handle on this if it is becoming an issue for your organization. So we ask, ‘Can the IRS really come to our collective rescue?’ For many, the answer is a resounding ‘yes’ as the IRS pilots an ‘Early Interaction Initiative’ with employers who may be falling behind in their payroll taxes. Many applaud the program and its pro-active approach to assisting employers.
The IRS website explains that in the past there has been a gap between
1) Federal Tax Deposit Alerts (FTD Alerts) that Field Collection staff receive regarding a decline in payroll tax deposits from an employer, and
2) the time delinquent cases are sent to them towards the end of a quarter but before quarterly payroll tax returns were due.
The IRS believes the ‘Early Interaction Initiative’ will accelerate the FTD Alert process allowing staff to work the alerts more quickly. Rather and alert than an official case for delinquency.
The IRS Publication 15 letter was mailed to tax professionals referencing the guide and it’s thick, complicated and a little scary if you’re a tax layperson. If you’re behind in either your monthly or semi-weekly schedule for making your payroll tax deposits, the IRS will connect with you via letter asking that you contact them to explain why your deposits are decreasing. In addition, they’ll explain the legal consequences of delinquency and detail the available resources. According to the IRS, field staff will prioritize those who have preexisting delinquencies. However, the case will be closed with explanation from the employer. To get back to compliance, the staff will assist employers with their payroll tax deposits and as their website states, “to correct the delinquent condition going forward and address the unpaid tax, penalty and interest.”
At Payroll Tax Management, Inc. (PTM) our software helps employers manage payroll taxes which we believe is a good option for any business struggling with tax compliance. If you want to understand what tax solution is right for your company, contact us!