Penalties For 941 Tax Non-Payment — And What to Do About Them

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As an employer, you are responsible for reporting on federal income tax withholdings — and forwarding payment to the IRS on time. This often proves easier said than done. However, if you’re struggling to pay 941 taxes or have already fallen behind, you risk having harsh penalties brought down on you by the IRS, as outlined below:

Late Filing And Payment Penalties

First and foremost, the IRS assesses extensive fees to employers who fail to pay 941 taxes on time. Depending on how late you deposit necessary tax payments, you could be assessed a fee ranging between 2 and 15 percent. The ultimate fee will largely depend on how long you take to pay the deposit. Keep in mind that the IRS also assesses fees for the late filing of 941 tax forms.

Penalties For Willful Lack of Payment

Late payment penalties are harsh enough, but consequences grow far more severe when the IRS suspects willful non-payment. Specifically, the IRS explains that those who fail to pay 941 taxes may, “in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax.” What’s more, such situations enable the IRS to pierce the corporate veil and go after individuals deemed responsible for non-payment.

Criminal Charges

In select circumstances, those found guilty of non-payment may suffer criminal charges. These are generally reserved for the most severe cases, however. Still, it’s not worth risking criminal action; ideally, the tax debt will be resolved long before this option is considered.

If you’re struggling to handle filing or depositing IRS 941 taxes, it behooves you to get in touch with the experts at the Highland Tax Group. Reach out to learn how you can resolve your tax issues and avoid the penalties highlighted above.