IRS highlights importance of payroll tax compliance
April 15, 2019
By Greenshades Software

Brittany Llorente

By Brittany Llorente

Payroll Taxes.

Two words that usually send a bit of anxiety through a payroll professional’s life. The deadlines, calculations and payments make in-house payroll difficult for most and that’s why our Payroll Tax Service solution was created.

Did you know?

“Payroll taxes withheld by employers account for nearly 72 percent of all revenue collected by the IRS, making noncompliance and cheating in this area one of the biggest problems for the nation’s tax system.”

The IRS recently released a News Wire issue on the subject of Payroll Taxes.

“Payroll taxes form a key part of our tax system,” said IRS Commissioner Chuck Rettig. “When individuals and businesses evade their employment tax obligations, it not only undermines our tax system, it also creates an unfair situation for people who are following the law. The IRS is committed to compliance in the payroll tax arena, which helps ensure fairness and faith in our tax system.”

While businesses have issues, the IRS’ first reaction is not enforcement.

“IRS revenue officers visited nearly 100 businesses around the country suspected of having serious issues with employment tax compliance. Business owners were informed about ways to catch up with back payroll taxes, how to stay current and the potential for civil and criminal penalties. The Trust Fund Recovery Penalty is one example of the legal ramifications of not collecting, accounting for and paying payroll taxes to the IRS when required.

“Enforcement is never our first resort, but protecting this significant source of revenue to the nation deserves our best efforts, including reaching out to help businesses help themselves,” said Darren Guillot, Director of IRS Field Collection Operations.”

The IRS stresses the accuracy of depositing and reporting on time. There are critical steps that come with this process can be complicated and tedious for employers.

“Employers know the rules—they must deposit and report employment taxes accurately—this is non-negotiable,” said Don Fort, Chief of IRS Criminal Investigation. “When employers fail to pay over the required employment taxes for whatever reason, they skip out on one of their most important responsibilities as a business owner. Not only are those employers cheating the system and their employees, they are cheating future generations relying on those taxes to help build the future.”

Fortunately, there are several tools to help employers understand Payroll Tax Compliance including: educational outreach, data analytics, civil investigations by highly trained revenue officers, as well as harsher measures such as lawsuits, seizures and criminal referrals to IRS CI.

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*Sources – IRS.Gov Newswire