The Hidden Danger in Business Finances
Many small and mid-sized business owners in New Jersey and Pennsylvania manage payroll themselves. But when times get tight, payroll taxes are often the first thing to slip. The IRS sees unpaid payroll taxes as one of the most serious violations — and the penalties can fall on individuals, not just the company.
What Are Payroll Taxes?
Employers must withhold Social Security, Medicare, and income taxes from employees’ paychecks and forward them to the IRS. These funds are considered “trust funds” because they belong to employees.
The Trust Fund Recovery Penalty (TFRP)
If payroll taxes are not paid, the IRS can assess the Trust Fund Recovery Penalty, which makes business owners, officers, or anyone with financial authority personally liable. The IRS can:
- Garnish your personal wages.
- Levy your bank accounts.
- Seize personal assets like cars or real estate.
Why Businesses Fall Behind
- Using payroll tax funds to cover other operating costs.
- Seasonal cash flow problems.
- Overextension from growth or debt.
How the IRS Pursues Business Owners
The IRS conducts interviews to determine “responsible parties” and whether they acted “willfully.” If they decide you fit those categories, you could face personal liability for thousands — even millions — of dollars.
The Local Impact in Haddonfield and Beyond
For business owners in New Jersey, where costs are high and competition is fierce, the TFRP can destroy both a business and a family’s finances. Once a levy hits, your operating accounts may be frozen, halting payroll and operations overnight.
Solutions Available
- Installment agreements for repayment.
- Offer in Compromise for businesses that qualify.
- Penalty abatement in cases of reasonable cause.
- Defense against TFRP assessments to protect individuals who should not be liable.
Take Action Now
The IRS doesn’t wait — and the longer payroll tax debt builds, the harsher the consequences.
McCauley Law Offices helps business owners in New Jersey, Pennsylvania, and Maryland fight payroll tax penalties and protect their personal assets. Call today for a free consultation.
