My name is Patrick Sheehan and I am a former IRS Attorney.
What Happens When Your Business Doesn’t Pay It’s Payroll Taxes.
If you own a business, chances are that you have employees. And if you have employees, you are required to withhold taxes from them.
When a business is doing poorly, what a business typically does is stop making federal tax deposits. They use the employees’ money to keep the doors open. Everybody hopes that the next big case or big order comes so that the business can catch up with the taxes.
Then all of a sudden the IRS comes knocking on your door. They ask you to pay the liability in full which most business owners cannot do. And if the business owner can’t do that and doesn’t cooperate with them, then the IRS is left to do mean and nasty things to the business owner which can include levies on the bank accounts or seizure of the business assets.
The worst thing a business owner can do is sign something. The IRS will frequently foist something on the business owner and ask for a signature on the spot. It’s the worst thing to do because then the business owner has given up his/her rights.