Consequences of Unpaid Payroll Taxes and Solutions with a Payroll Tax Attorney

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unpaid taxesTaxes are an inevitable part of running a business, but failing to remit payroll taxes can lead to dire consequences for your financial health and the longevity of your operation. The responsibility of accurately calculating and timely submitting payroll taxes falls heavily on the shoulders of employers and understanding the ramifications of unpaid payroll taxes can be crucial in avoiding potential pitfalls.

Businesses that fail to meet payroll tax requirements risk facing penalties, interest charges, and enforcement actions from the IRS, making it essential to address these issues with urgency and explore viable solutions.

In this informative blog post, we will discuss the consequences of unpaid payroll taxes and the dangers they pose to the sustainability of your business. We will delve into the potential penalties, accrued interest, and IRS enforcement measures that can be triggered by neglected payroll taxes.

Moreover, we will outline the invaluable role of a payroll tax attorney in helping businesses navigate the complexities of payroll tax resolutions, providing the guidance necessary to safeguard the financial stability of your enterprise.

Facing a payroll tax issue places your business in a vulnerable position, but with the right approach and by seeking the expertise of a qualified payroll tax attorney, you can alleviate the burden of back taxes and develop a strategy to resolve your tax obligations and protect your hard-earned assets.

Following the introduction, gain actionable insights into the most effective strategies for resolving unpaid payroll taxes and the services a payroll tax attorney offers to help businesses regain their financial footing.

Are you struggling with unpaid payroll taxes and seeking professional guidance? Our experienced payroll tax attorneys are here to help. Contact us to schedule a complimentary consultation and learn how we can assist you in resolving your payroll tax issues and protecting your business assets.

Consequences of Unpaid Payroll Taxes

The consequences of unpaid payroll taxes can be severe and far-reaching, affecting both your business finances and future operations. In this section, we will discuss some of the most significant implications of neglecting payroll tax obligations.

  • Penalties and Interest Charges

    The most immediate consequences of unpaid payroll taxes are the accrual of penalties and interest charges. The IRS imposes various penalties for late or non-payment of payroll taxes, including a failure to deposit penalty, failure to pay penalty, and penalties for incorrect filings. Additionally, the IRS charges daily interest on unpaid payroll tax balances, compounding the financial strain on your business.

  • Trust Fund Recovery Penalty (TFRP)

    The Trust Fund Recovery Penalty (TFRP) is a sanction imposed on businesses that fail to remit withheld payroll taxes to the IRS. This penalty is applied to the trust fund portion of payroll taxes (federal income tax, Social Security tax, and Medicare tax withheld from employees’ paychecks) and can be assessed against responsible individuals within the company, such as owners, officers, or managers.

  • IRS Enforcement Actions

    When unpaid payroll taxes continue to accumulate, the IRS can initiate enforcement actions against your business, which may include:

    • Filing a notice of federal tax lien
    • Issuing a levy or garnishment on business property, bank accounts, or receivables
    • Seizing and selling business assets to satisfy the tax debt

Resolutions for Unpaid Payroll Taxes

There are several resolution options available to businesses facing the consequences of unpaid payroll taxes. Understanding and pursuing the most suitable resolution strategy for your circumstances can help protect your business assets and ensure future fiscal viability.

  • Installment Agreement

    An installment agreement is a payment plan negotiated with the IRS, allowing your business to pay off the tax debt in manageable monthly installments over an extended period. By establishing an installment agreement, your business can avoid IRS enforcement actions and continue operating while satisfying outstanding payroll tax obligations.

  • Offer in Compromise

    An offer in compromise is a settlement agreement in which the IRS accepts a lesser amount than the total tax liability owed, considering the taxpayer’s financial circumstances and future earning capacity. Successfully negotiating an offer in compromise for unpaid payroll taxes often requires the guidance and expertise of a knowledgeable payroll tax attorney.

  • Currently Non-Collectible Status

    In certain situations, your business may qualify for Currently Non-Collectible (CNC) status, essentially placing the collection of your tax debt on hold due to financial hardship. CNC status provides temporary relief from IRS enforcement actions but does not eliminate the tax debt, which will continue to accrue interest and penalties.

  • Voluntary Disclosure

    In cases where unpaid payroll taxes result from willful noncompliance, such as intentionally underreporting or concealing taxable income, a voluntary disclosure can help mitigate potential criminal penalties. By proactively cooperating with the IRS, your business can demonstrate good faith in addressing tax improprieties and seek leniency in resolving outstanding payroll tax liabilities.

How a Payroll Tax Attorney Can Help

The support and guidance of an experienced payroll tax attorney are indispensable in addressing the consequences of unpaid payroll taxes and securing a favorable resolution for your business.

  • Expert Representation

    A payroll tax attorney can provide expert representation in negotiations with the IRS, advocating for your best interests, and ensuring that your rights are protected throughout the resolution process.

  • Tailored Resolution Strategy

    Every business’s financial situation and tax liabilities are unique, requiring a customized resolution strategy. A skilled payroll tax attorney will analyze your business’s specific circumstances and develop a tailored approach to resolving your unpaid payroll tax obligations.

  • Compliance Procedures

    To protect your business from future payroll tax issues, a payroll tax attorney can advise on best practices for payroll tax compliance, ensuring that your business adheres to all relevant tax laws and avoids potential penalties or enforcement actions.

  • Appeal and Litigation Support

    If you disagree with an IRS decision regarding your payroll tax liabilities, a payroll tax attorney can assist in filing an appeal or pursuing litigation in the United States Tax Court to secure a favorable outcome for your case.


Unpaid payroll taxes pose significant risks to the financial stability and longevity of your business. However, with the right strategies, expert guidance, and the support of a skilled payroll tax attorney, you can address these liabilities and protect your business assets. By taking a proactive approach and seeking professional assistance, you can navigate the complex landscape of payroll tax resolutions and ensure a secure financial future for your business.

Don’t let unpaid payroll taxes threaten your business’s financial future! Get professional guidance from Segal, Cohen & Landis. Our experienced payroll tax attorneys can help you resolve your tax issues and protect your business assets. Contact us today to schedule a complimentary consultation and take the first step toward financial stability. With our help, you can overcome your payroll tax challenges and achieve peace of mind.

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Segal, Cohen & Landis will help you successfully resolve challenging federal and state tax problems including back taxes, audits, wage garnishments, and levies. We will negotiate your offer in compromise or installment agreement. Our IRS tax attorneys will take you through the resolution process to achieve your best possible outcome.