Will Form 843 Withheld 2024-2025

Hi, I'm Kept Kepner CPA here in Dallas. Have you heard of the hundred percent penalty? Well, that's what the IRS calls a penalty when a company doesn't pay its payroll taxes. So, the IRS assesses the officers and/or owners for paying the trust fund portion of those payroll taxes. Trust fund means the taxes that are withheld from an employee's paycheck. If you're the owner of a corporation and the corporation doesn't pay its payroll taxes, you can be held personally liable for the trust fund portion of those taxes. They call it a hundred percent penalty, but that's really a misnomer because if you pay all of those trust fund taxes, then the corporation only owes the remaining company share and penalties and interest. So, it's not like it's really collected twice, but it's called a hundred percent because it's owned by the company and it's owned by you, the owner or officer, until it's paid in full. So, what happens if you learn about the unpaid payroll taxes that occurred before you became an owner or officer of a company? Well, unfortunately, the IRS can get you there. If an owner, CFO, or CEO of a company comes into a new business that had been in operation and had not paid its payroll taxes before they came on board, they can be held personally liable for the trust fund portion of these payroll taxes, even though they had nothing to do with originally not having those paid. If you are coming into a company in a leadership role as an officer, CFO, or CEO, you want to find out if that company has paid all its payroll taxes. If they haven't, then you've got to make sure that they are paid first, or you're going to be out of luck...