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Video instructions and help with filling out and completing Form 843 Basics

Instructions and Help about Form 843 Basics

Thank you for joining us we are doing the trust fund recovery penalty basics course as we go through the course within the next hour we're gonna touch on a little bit about what trust fund recovery penalty basics are we'll talk about some compliance issues and concerns the diary's has as well as some recent efforts and new things they're doing about taking care of those concerns well touch on the trust fund recovery penalty of course talking about it directly really understanding it and some strategies for its defense for your client and we'll talk about employers their unfiled and unpaid employment tax issues even though that may not seem like it there are some strategies that you can use that help to eliminate or prevent as much of the trust fund recovery penalty risk so we're gonna dive right into this and first of all we need to just make sure that it that you have a good understanding as to what this area is when we talk about trust fund recovery penalties so as you can imagine the IRS is very concerned as well as the Department of Justice because so much of our revenue more than seventy percent of all revenues collected by the Treasury comes in through employment taxes one-third about 33% of that is just so scary Medicare and unemployment so you can imagine if there is a large portion of this that is not being paid so we'll talk about the tax gap would exactly is the tax gap that is the difference between what should be paid versus what is actually coming into the Treasury so as of April of 2022 which they put these statistics out every once in a while 458 billion dollars is the tax cap but of that number more than 59 billion of the tax on unemployment tax returns alone remains unpaid and the underreporting gaps that's the difference between what should be reported in and what actually is is 15 billion on FICA and employment tax so you can understand why this has become a top priority for the government and if you've been around any at all last year and heard some of the news wire and directives 2022 they announced many times that they were gonna be pursuing very aggressively criminal civil penalties against these employers that were not complying so what are some of these issues and concerns and what are they doing about it so they tax payer advocate office report between 2022 and 2022 fiscal year the most recent report we have shows an average of 4.2 billion billion with a B dollars per year in trust fund tax debts is uncollectible so of that uncollectible amount that's equal roughly to one and a half times the amount they actually managed to collect on those debts so including refund offsets installment agreements everything they do about it the amount that is uncollectible is one and a half times what they collect each year so that is a growing concern as you can imagine for the IRS in research they've conducted over the past few years they have determined that early intervene intervention which is logical is the key to stopping that like with anything if they can get ahead of that problem that's the key to helping to solve that or not letting it grow too far out of hand so they have an answer some new initiatives moving forward and one of those initiatives or new items is an agreement for third party outside collection agencies there are four collection agencies that were announced that are now being allowed to help with the IRS or this is part of their plan help the IRS collect some of those old debts so just to stop for just a quick moment and we want to make sure we're going to touch on a little bit more but so that we define trust fund taxes we are gonna go over that a lot more but that is just the concept of trust trust fund that is something you're holding aside in trust your acting as the government's collector you're not supposed to use that spend it you're supposed to just hold it aside and pay it in so I just wanted to find that concept real quick and what will define exactly what taxes those are in a moment so IRS concerns about employers they're worried too you know if they fail to make timely deposits they're worried about employers that pay just the net payroll so those are ones that pay just the payroll tax they actually you know deduct it from their payroll and they you know figure out what those tax amounts are and then just pay the net payroll tax and ignore those tax payments they just deducted the ones that pay in cash obviously have a higher probability of non-compliance the ones that report employees as independent contractors so they're misclassifying those employees or they fail to file a form 941 for a period of no deposit so what does that one mean they are not filing the form because they think well if I don't file I just couldn't pay it this time I don't want the IRS to know I didn't pay the reason this is problematic is that's intent you're purposely doing something with an intent to conceal you don't want the IRS to know you didn't pay so you're not filing that 940 mom that actually can trigger criminal proceedings because they're intending to conceal they're in there they're operating knowing that this is a wrong thing the problem always comes from most often a employer that has cashflow concerns I mean this is you know not all the way 100 percent across the board but most often in our office we see it's caused by those employers that just they couldn't pay you know this bill or that bill they're tempted.

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