Fear the 100% penalty — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Fear the 100% penalty

Get PDF file

by on
in Small Business Tax

One of the most onerous provisions in the tax code is the “100% penalty.” Essentially, if your company fails to deposit payroll taxes that were withheld from employee paychecks with the IRS, you could be personally liable for 100% of the unpaid amount.

Strategy: Make sure that payroll taxes are paid on time. Establish backup procedures to avoid slipups.

The 100% penalty can potentially be assessed against any person who (1) is responsible for collecting or paying withheld federal income and employment taxes and (2) willfully fails to collect or pay them. It doesn’t take much for a failure to be “willful.” For instance, the IRS says the penalty applies if the responsible person was aware, or should have been aware, of the tax liability and intentionally disregarded the law or was indifferent to its requirements.

Furthermore, the IRS is aggressive about collecting the 100% penalty. As a new Tax Court decision shows, it could g...(register to read more)

To read the rest of this article you must first register with your email address.

Email Address:

Related Articles...

Leave a Comment

Previous post:

Next post: