If you are an employer or employee who has fallen behind on payroll taxes and are now facing a hefty bill from the Internal Revenue Service, ignoring it will not make it go away. When it comes to unpaid payroll taxes, the IRS often comes down much harder on taxpayers than they do with unpaid income taxes. There have been countless instances where the IRS has gone as far as closing down a business or sending the owners of those businesses to prison for back payroll taxes. But, who does the IRS hold accountable for payroll tax errors?
What Is the Employer’s Responsibility?
According to the IRS, employers are responsible for reporting the income and employment taxes that are withheld from their employee’s paychecks. This information is required to be reported on the Employer’s Quarterly Federal Tax Return form, also known as Form 941. The employer is also responsible for the depositing of these reported taxes, in full, to a bank or other financial institution that is authorized in compliance with Federal Tax Deposit Requirements. Employers are also required to submit a Federal Unemployment Tax (FUTA) return each year and deposit those taxes as well.
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