Discussion:Back payroll tax liabilities
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Discussion Forum Index --> Basic Tax Questions --> Back payroll tax liabilities
Discussion Forum Index --> Tax Questions --> Back payroll tax liabilities
Carole9819 (talk|edits) said: | 30 September 2008 |
| Hello,
I have a new client that owes payroll taxes from Jan.2008 though Aug. 2008. I have discussed with the client that he must start to pay the taxes AND on time (go figure). He has agreed to this. My question is....while I will be keeping the company current on payroll taxes going forth, what do I start to payoff first? Do I work on the Jan. liabilities and go forward or do I pay Aug. liabilities and go backwards? The company is an s.corp and a monthly depositor. Thank you! Carole | |
| 30 September 2008 | |
| you have them pay the 'trust fund' taxes first, then go back to the employer's portion and interest & penalties. do a search on how to do this. | |
Carole9819 (talk|edits) said: | 30 September 2008 |
| Hi Kevinh5,
So are you saying that I shouldnt try to payoff each month of the total liabilities first? Thanks, Carole | |
Carole9819 (talk|edits) said: | 30 September 2008 |
| Why is that?
Thanks for responding. | |
Carole9819 (talk|edits) said: | 30 September 2008 |
| Thank you!!!! | |
| September 30, 2008 | |
| TFRP = trust fund recovery penalty. I've added it to the acronym list. | |
Actionbsns (talk|edits) said: | 30 September 2008 |
| I just want to add a question on this scenario. If you are only going to pay the trust fund part, how are you going to let IRS know that's what you are doing? The coupons have no indication of this, nor does the EFTPS screen? So they would get a payment and it would simply show up as not enough. Kevin, your comment about doing a search to see how to do this leads me to believe there is a special form or procedure to be followed. I'm just curious for future reference. Thanks for taking the time. | |
| 30 September 2008 | |
| Duplicating what others have said. If the client is a corporation or LLC, then designate the payments to the withheld tax portion of the liability. This trust fund portion, if unpaid, can result in a separate assessment against the responsible individuals.
If a sole proprietorship or partnership, pay the tax on any that have not had the "Urgent Notice" sent by certified mail. When that goes out, the penalty for failure to make tax deposits jumps from 10% to 15%. After that, pay the tax on any where the Urgent Notice has been issued because late payment has been increased from 1/2% per month to 1% per month. Then pay any tax for other periods then penalties and interest. Late payment penalty accrues only on the tax so you want the tax paid first. | |
