What happens if a San Diego business doesn’t comply with the IRS and all filing and reporting requirements? Can you face criminal prosecution or be held personally liable if your company makes a mistake with the IRS?
Generally speaking, an officer of a corporation may risk personal liability for their business returns and other exposures in the event of gross negligence, criminal acts, intentionally deceptive actions or exceeding your authority as an officer of the corporation. The IRS has a lot of latitude and power to pursue corporate officers and corporate financial professionals to recover money which is owed to the IRS.
One of the largest “buckets” where a San Diego business doesn’t comply with the IRS is often related to “trust fund” violations. As an employer, you and your company are required to withhold amounts from each employee’s pay check and pay them regularly to the IRS. This includes payroll taxes such as Medicare and Social Security as well as use taxes and normal withholdings.
- There are substantial financial penalties for violations of trust fund responsibilities including but not limited to:
- Payment of associated taxes
- Payment of resulting penalties and interest
- Liability for an additional penalty which would equal any amounts which were unpaid, evaded or uncollected
The officers and employees targeted by the IRS in these cases are usually those with the ability to issue checks, take financially related decisions, those with the responsibility to submit the taxes themselves as well as anyone with knowledge of the company’s tax responsibilities and subsequent or associated failure to comply.
In many cases when a San Diego business doesn’t comply with the IRS there are issues associated with embezzlement or exposures based upon the failings of a single corporate officer. It is important to seek the immediate experienced and proven counsel of Janathan Allen and contact us or call to schedule a free consultation at 866-631-3470. Learn how to protect your interests and develop a strategy to manage the situation as well as any resulting tax liens and levies.