Whether mismanagement, fraudulence, or misappropriation, trust fund violations lead to serious consequences with the IRS. When businesses fail to keep their remittance promises to the government, financial officers and/or owners put themselves and their businesses at considerable risk — while violating the trust of their employees.
Trust funds are the payroll liabilities that businesses are mandated to withhold from employee wages, such as income tax, Medicare, and Social Security. The government therefore will ‘trust’ that the employer is allocating these funds correctly on behalf of their employees.
Not only does our government’s array of civic and federal services run on tax remittances, ‘trust funds’ remitted to the U.S. Treasury make up employee retirement benefits. Yet, all too often, when a company faces cash-flow problems, temptation arises.
When struggling businesses cannot pay bills or make payroll on time, unscrupulous businesses elect to access funds earmarked for the government. Gambling their employees’ futures and their own, they assume that they can make up the difference with some boon of future earnings. It becomes a costly miscalculation.
If a struggling company of 20 employees (or more) commits this violation repetitively, it compounds into full-blown trust fund fraud. Over time, the result can be a tax debt totaling millions of dollars. By law, someone will pay.
If you have recently laid off employees and closed the doors on a failed business, payroll liability taxes are still due. IRS Trust Fund Recovery Penalties can be severe. Tax companies exist to help you properly navigate problems like these. It is unwise to face this alone. If you find yourself in this predicament, retain the best tax relief services in your area to help you now.
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Secure your financial future with legal tax solutions that work for you. Contact us today!
Secure your financial future with legal tax solutions that work for you. Contact us today!
