This article focuses on the potential criminal consequences that can arise when a business fails to collect or pay over withheld tax.
When multiple entities have a relationship with a worker, the determination of which entity is the “employer” can have significant additional tax consequences.
Practitioners should have a basic awareness of some of the unique tools the government uses to enforce employment tax laws.
The government can impose a 100% trust fund recovery penalty on “responsible persons” who were required to pay over the money or who controlled the funds.
A responsible person may be subject to the TFRP if it can be shown he or she willfully failed to pay the trust fund taxes due.
This case offers clarification for an employer looking to classify its workers as independent contractors.
Determining whether a worker is properly classified for tax purposes as an independent contractor or an employee is complex.
Employers will be allowed only a single, nonautomatic 30-day extension of the filing due date for the Form W-2 series.
The DOL's Wage and Hour Division issued an Administrator’s Interpretation addressing worker misclassification, which may deny employees significant workplace protections and lower tax revenues.
The good news for workers is that there will also be no increase in the amount of wages subject to Social Security taxes (old age, survivor, and disability insurance).
Workers want payers to be held responsible for payroll taxes and employee benefits, and payers/businesses want to shift that responsibility to their workers to save money and lessen their administrative burdens.
Employers in the for-profit, tax-exempt, and public sectors may overlook a number of issues involving the application of the employment tax rules.
The Erwin case is an important reminder that an accountant can be held liable for a client’s unpaid employment taxes.
A business can take these steps to strengthen its position that it is properly classifying workers as employees or independent contractors and minimize risk.
In an attempt to address the low rate of e-filing of employment tax returns (currently 31%), the IRS announced that it is considering opening a free e-file program for businesses to e-file employment tax returns.
A taxpayer who asserted he was no longer a partner in a business during the periods at issue was nevertheless held to be a responsible person and liable for the 100% penalty for failure to pay over withheld employment taxes.
The IRS announced that it is considering opening a free e-file program for businesses to e-file employment tax returns.
The IRS issued a proposed revenue procedure that would permit employers who file refund claims for overpaid FICA and RRTA taxes to obtain their employees’ consent to the refund claims electronically.
The IRS announced that it will disallow all refund claims filed while resolution of the issue of whether severance payments to employees are subject to FICA tax was pending, as well as the appeals filed in response to the denial of refund claims.
IRS Analyzes Whether Third-Party Employment Tax Returns Are Sufficient to Start Assessment Statute of Limitation
The Office of Chief Counsel analyzed whether an employment tax return prepared and filed by a third party on behalf of an employer was sufficient to commence the period of limitation on assessment for the employer under Sec. 6501.