Payroll Tax Problems: How to Protect Your Business and Resolve IRS Issues

When payroll tax issues arise, they can quickly become one of the most serious and urgent problems a business owner can face. The IRS treats payroll taxes—particularly trust fund taxes—as a top enforcement priority.

As a CPA and tax resolution specialist with over 38 years of experience, I’ve helped countless business owners navigate payroll tax issues, protect their companies, and resolve IRS action before things spiral out of control.

At Tax Resolution Specialists LLC in Bayville, New Jersey, we understand the stress and uncertainty payroll tax problems create, and we’re here to help you take back control.

Why Payroll Tax Problems Are So Serious

Payroll taxes are unique because part of the tax withheld belongs to your employees. When these funds go unpaid, the IRS considers it a very serious matter—far more serious than regular income tax debt.

Failure to file payroll tax returns (Form 941 or 940) or failure to remit payroll taxes can lead to:

Aggressive IRS Collections

The IRS can issue:

• Bank levies

• Asset seizures

• Accounts receivable levies

• Business liens

Trust Fund Recovery Penalty (TFRP)

If the IRS believes you intentionally or willfully failed to remit payroll taxes, they can assess the Trust Fund Recovery Penalty.
This penalty can be assigned personally to owners, officers, bookkeepers, and anyone who had authority over finances.

Interest and Civil Penalties

Penalties for payroll tax issues add up quickly and can devastate cash flow.

Criminal Investigation (in the most severe cases)

Repeated or intentional payroll tax violations can result in criminal charges, though this is typically reserved for extreme or fraudulent cases.

Common Payroll Tax Problems

Over my career, I’ve seen payroll tax issues arise from a wide variety of situations, including:

• Business cash flow shortages

• Economic downturns

• Bookkeeping errors

• Misclassification of workers

• Poor internal controls

• Third-party payroll company failures

• Simply falling behind and not knowing how to catch up

Most business owners didn’t set out to avoid payroll taxes—they just ran into financial challenges or administrative struggles.

What Happens if Payroll Taxes Go Unresolved?

These are among the fastest-growing tax debts, and the IRS will take action quickly.
Consequences include:

• Being compelled into a payment plan

• Business bank account freezes

• Forced closure of business operations

• Assessment of the TFRP against responsible individuals

• Personal liability for business tax debt

• Damage to business and personal credit

The longer payroll tax problems continue, the fewer options remain.

How We Help Resolve Payroll Tax Problems

At Tax Resolution Specialists LLC, we offer full-service IRS representation designed to protect both the business and its owners. Our approach includes:

Stopping IRS Collection Action

Once you retain us, the IRS must communicate through our office.

Analyzing Payroll Tax Exposure

We determine:

• What the IRS claims you owe

• Whether trust fund penalties are being pursued

• Whether you are personally at risk

Negotiating a Manageable Resolution

Every situation is unique. Depending on your financial condition and business viability, solutions may include:

• Installment Agreement

• Partial-Pay Installment Agreement

• Offer in Compromise

• Penalty abatement

• Structured business workout

Trust Fund Recovery Penalty Defense

We work to challenge improper TFRP assessments and minimize personal exposure.

Ensuring Future Compliance

We help put systems in place to prevent future payroll tax problems so your business remains protected.

You’re Not Alone — Payroll Tax Problems Can Be Fixed

Many successful businesses have stumbled into payroll tax issues. What matters now is taking action before the IRS forces your hand.

With nearly four decades of experience helping businesses resolve payroll tax debt, I understand how to negotiate with the IRS and create a plan that protects both your livelihood and your future.

Expertise

As CPAs, we’re federally-licensed to represent taxpayers before the IRS, ensuring you have the highest level of expertise at your service.

Personalized Service

We understand that every taxpayer’s situation is unique. Our approach is tailored to meet your specific needs and circumstances.