Beat the Payroll Tax Penalty – How It’s Done
Payroll tax penalties, IRC §6656, can be devastating. A payroll penalty usually hits businesses that can least afford them, new business and businesses with weak cash flows. There are things businesses can do to reduce a payroll tax penalty.
The first thing to consider is to ask the IRS to abate (eliminate) the payroll tax penalty. This is very feasible if the underpayment of the payroll tax deposit is the exception, not the rule. For example, if a new business was late with its first payroll deposit, but paid all other payroll deposits on time, the business might be able to get the payroll penalty abated. Another example would be a business that had a long history of paying payroll deposits on time, but was late for one deposit only. Basically, to get the IRS to abate a payroll tax penalty, the employer needs to show that the late payroll deposit payment was an unusual event. If the payroll tax penalties cannot be abated, you should look at other strategies. For payroll tax problems, please call or email us today at IRS-SOLV. It’s that simple to get our help. Thanks for reading!
John E. Ellsworth, JD
IRS-SOLV, a nationwide tax practice