Employer (Payroll) Tax Investigations
Every business that has employees is required to pay payroll taxes. Failure to pay payroll taxes on time frequently results in the imposition of interest and penalties. In some circumstances the failure to pay payroll taxes can be a felony subject to punishment by imprisonment and/or fine.
The IRS has lately become very aggressive in pursuing unpaid payroll taxes. The Service is also willing to criminally prosecute those who willfully fail to file payroll tax returns, or to pay payroll taxes.
If you are the potential target of an IRS assessment of the Trust Fund Recovery Penalty, or have been notified by the IRS that you will be interviewed in connection with the TFRP, contact Thorn Law Group so we can explore your options with you.
Also of concern to businesses is the recent government announcement that it plans to increase enforcement efforts in the area of worker misclassification by businesses. The Internal Revenue Service announced it will be paying more attention to worker classification issues as the number of workers being classified as independent contractors as opposed to employees is steadily increasing. As part of the Questionable Employment Tax Program – a joint initiative among the IRS, the National Association of State Workforce Agencies, the U.S. Department of Labor, the Federation of Tax Administrators and several state workforce agencies – the IRS will share information, including tax returns, audit reports and audit plans, with state workforce agencies in order to uncover employers who may be misclassifying workers or taking other inappropriate actions involving employment taxes.
Businesses found to have misclassified workers may be subject to significant back taxes and penalties and even criminal prosecution. At Thorn Law Group, we are experienced at advising clients on the process the IRS and the courts use to determine a worker’s appropriate classification for tax purposes. If you are or believe you may be subject to a worker classification audit, contact Thorn Law Group for advice.
For more on the most up-to-date information on civil audits and offshore accounts, please visit News & Events.
Contact Kevin E. Thorn, Managing Partner at firstname.lastname@example.org or 202-349-4033 if you have been contacted by an IRS Revenue Agent for an audit. We will work with you and the IRS to manage the audit process and assess your options if disputes regarding your tax liabilities arise.
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