When it comes to settling the bill with the IRS, the first thing that pops into most people's heads is personal and business income. While that is the case, the agency does collect other taxes as well. A Massachusetts small business owner who has employees needs to remember that the nation's taxing authority expects to receive the payroll taxes owed. If those are not paid, employers could find themselves facing charges of tax evasion.
For example, a man in a nearby state recently received a sentence of five years' probation for tax evasion because he failed to make the required payroll tax payments for two employees. Ironically, he owned a tax preparation business at the time. Between 2011 and 2014, the business owner should have submitted Employer's Quarterly Federal Tax Returns paying the Federal Insurance Contribution Act and income taxes for the two individuals each quarter.
However, according to the government, he failed to do so seven times during the period above. In addition, the New Jersey man failed to pay his own income taxes for 2011 through 2015. Now, in 2019, he received his sentence.
Massachusetts small business owners need to make sure they keep up with their quarterly tax obligations for employees. Even years later, the IRS could conduct an investigation, and the business and/or the owner could face charges for tax evasion. If business owners need assistance in understanding their tax obligations or defending against charges, they should take action as quickly as possible to work through the situation in order to avoid ramifications that could adversely affect the future of the business and the owner's personal life.