If you are not incorporated or doing business as a limited liability company (LLC), then you are doing business as either a sole proprietor or a partnership. In this case, the individual owner is personally liable for all unpaid taxes, including federal and state withholding taxes, penalties and interest.
If you are the shareholder of a corporation or the member of a limited liability company, then, under federal law, liability can be imposed on what is known as the “trust fund” portion of payroll taxes. This amount equals the amount of federal withholding taxes deducted from the employees check as well as the employee’s portion of FICA (social security) and Medicare tax. Interest and penalties imposed on the entity (corporation or LLC) are not passed through under the federal laws.
In some states, such as Michigan, unpaid state taxes, including penalties and interest, can be imposed upon persons deemed to be in control of the entity which failed to pay the tax. This includes state sales tax, single business tax, as well as state withholding taxes.
Often it is necessary or desirable to change the structure of your business to minimize some liabilities from the past and help plan for the future. StopTaxDebt.com has the expertise to identify these needs and prepare your business for the years to come.
There are times when a taxpayer’s tax debt requires us to think “outside the box” so the taxpayer can remain in business and keep his assets beyond the reach of the tax authorities. In this situation, our attorneys often find solutions that include restructuring of the business to achieve this ultimate goal.
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