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6 Replies Last post: Dec 9, 2008 9:16 PM by MachineDesign

Behind on Payroll Taxes - what can I expect from the Fed

Dec 6, 2008 8:12 PM

MachineDesign 6 posts since
Dec 6, 2008

Well I am sure our company is not alone - we are two months behind paying our federal payroll taxes. I am waiting for the fallout from the IRS but we have not received a letter or call to date. What can I expect as we move forward? Looking ahead I do not see that it will be possible for us to pay the balance for the coming months. Is there a something we can do to help the situation (other than pay in full) such as contact an agent or otherwise.
Thanks for your replys in advance - MD

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LUCKIEST 7,935 posts since
Aug 6, 2007

1. Re: Behind on Payroll Taxes - what can I expect from the Fed Dec 6, 2008 9:10 PM

Behind on Payroll Taxes

Tell us more. How long have you been in business?? Do you have an Accountant?? Falling behind on Payroll Taxes gets most companies in BIG trouble.

It would help to have more info. I am guessing that you filed your Third quarter taxes on time. You will be in less trouble if you file your last quarter taxes timely (even if you do not pay the taxes timely).

Let the IRS know your plans before they come calling.

Good luck, LUCKIEST

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TaxPartner 13 posts since
Dec 6, 2008

2. Re: Behind on Payroll Taxes - what can I expect from the Fed Dec 7, 2008 1:15 AM

Machine,

You are not alone and I'm sure the IRS is fully aware of your common "economically induced" situation. You will be assessed penalties for not paying your payroll taxes on time. Eventually you will receive a letter from the IRS. FORTUNATELY penalties may be waived if the IRS determines that the late payments were due to reasonable causes and not willful neglect. UNFORTUNATELY, the IRS gets to determine the difference between reasonable cause and willful neglect. If I were you, I would be proactive and contact them with my situation via phone first and then by follow up letter. I have a few clients in this situation and that's what I did for them. If you have any other questions you can contact me at taxes@dhartaccounting.com. I hope this helped.

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LUCKIEST 7,935 posts since
Aug 6, 2007

3. Re: Behind on Payroll Taxes - what can I expect from the Fed Dec 7, 2008 7:35 AM

in response to: TaxPartner

Behind on Payroll Taxes

Good answer and welcome Hope to hear more from you.

LUCKIEST

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MachineDesign 6 posts since
Dec 6, 2008

4. Re: Behind on Payroll Taxes - what can I expect from the Fed Dec 7, 2008 8:06 AM

in response to: TaxPartner

Thank you for your replys

I will be sure to contact them again to explain our position and then follow up with a letter to secure our position. I guess it would be best to provide some details as to our situation - a simple cash flow breakdown showing how we got where we are. If there is a chance we can have it waived then we should get our position documented and leave ourselves the best chance of a favorable review by the IRS - make our case for reasonable cause.

Luckiest - We have been filing our taxes month to month we have just not made the payments.

Tax Partner - how did it turn out for your clients? Any advice on what to tell them? As I said above - it is a cash flow issue so I can outline this history with a detailed report or explain in words more simply what has transpired over the last three months.

Thanks again

MD

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TaxPartner 13 posts since
Dec 6, 2008

5. Re: Behind on Payroll Taxes - what can I expect from the Fed Dec 9, 2008 6:20 PM

in response to: MachineDesign

Machine,

Once client had no prior history of filing or paying late so it was easy to get penalties abated.

For the other, we just submitted information a few weeks ago (The IRS doesn't respond as fast as we would like for them to). The agent I spoke to basically told me with putting in writing what I explained to her verbally, she didn't forsee there being a problem.

My advice to you is to tell the truth and to tell them the truth as fast as you can. Before sending cash flow reports that may or may not read, I would consider calling them first and asking what would be best to send.

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MachineDesign 6 posts since
Dec 6, 2008

6. Re: Behind on Payroll Taxes - what can I expect from the Fed Dec 9, 2008 9:16 PM

in response to: TaxPartner

Thanks for the advice. We have called the IRS and drafted a letter as well. I will let you know how it turns out when we get some answers back from the IRS.

Thanks for all you help -

MD

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Behind on Payroll Taxes - what can I expect from the Fed

Dec 6, 2008 8:12 PM

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