Payroll Tax Debt: How Long Before the IRS Tracks You Down?

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As a business owner, you face a myriad of deadlines and scheduling conflicts. With so much going on, it’s shockingly easy to not file Form 941 or deposit payroll taxes on time. The sooner you make amends, the better; in addition to immediate fines, you risk swift action from the IRS.

Deposit Deadlines

Form 941 is due the month following the end of the quarter. Deposit deadlines, however, vary from one company to the next. Most businesses abide by either monthly or semi-weekly deposit schedules. The required depositing system must be determined prior to each calendar year’s beginning.

With monthly deposits, payroll taxes for one month must be provided by the 15th of the following month. Semi-weekly deposit schedules require employers to deposit taxes for Wednesday, Thursday, or Friday payments by the following Wednesday. Deposits for Saturday, Sunday, Monday, or Tuesday payments must be made by the following Friday.

What If You Fail to Deposit On Time?

At one time, the IRS waited sixty days to send notice of undeposited payroll taxes. Now, Education Advisor for the American Payroll Association Jim Medlock reports that the IRS takes swift action. Penalties for undeposited taxes begin almost immediately — and increase rapidly if more than a few days late.

Eligibility for Tax Filing Extensions

If your company regularly files Form 941 on time, you may be eligible for a ten-day extension. No additional extensions are available.

Statute of Limitations

You defied the odds, and have yet to hear from the IRS. Don’t expect your good fortune to continue; with a statute of limitations of ten years for corporate payroll taxes, you could receive an unwanted visit far in the future if you deliberately ignore payroll tax debt.

941 tax debt can weigh on the mind and lead to anxiety, frustration, and hopelessness. We can help. Call a qualified enrolled agent at the Highland Tax Group now at 720-398-6088.