Filing Your Return(s) and Paying Taxes

Importance of Timely Deposits   

If you do not timely pre-pay your tax using deposit coupons or if you were not required to make any deposit and/or did not include your payment when you filed your return, we will charge you interest and penalties on any unpaid balance.

We may charge you penalties for not depositing employment taxes timely up to 15% of the amount not deposited, depending upon how many days late you make the deposit.

If you do not pay withheld trust fund taxes, we may take additional collection action.

• We can require you to file and pay your taxes on a monthly rather than quarterly basis.
• We can also require you to open a special bank account and deposit the amounts required to be withheld within two banking days after you pay wages to your employees. If, after you are required to do so, you do not open a special account and make timely deposits, you may be found guilty of a misdemeanor.

To encourage prompt payment of withheld income and employment taxes, including Social Security and railroad retirement taxes or collected excise taxes, Congress passed a law that provides for Trust Fund Recovery Penalty  the trust fund recovery penalty. This penalty is used as a tool for collection of unpaid employment taxes. The penalty also applies to those excise taxes which are commonly referred to as collected excise taxes.

If you are a responsible person, we can assess  this penalty against you immediately after you do not pay trust fund taxes in response to a notice and demand for payment. Also, we can apply this penalty regardless of whether you are out of business or without assets.

Caution: Once we assess the penalty, we can take collection action against your individual assets, such as filing a Federal tax lien if you are the responsible person (s).

Important References:  

Publication 15 Circular E         Employers Tax Guide
Form 8109                                 Federal Tax Deposit (FTD) Coupon (not available electronically)