Can I be held personally liable for my company’s unpaid employment taxes?

If your business owes unpaid employment taxes to the IRS, you may receive a visit from an IRS Revenue Officer. The agent will initiate a trust fund recovery penalty investigation. The purpose of this investigation is to collect the unpaid taxes that were withheld from the employees’ paychecks but not paid over to the IRS. The IRS can collect these unpaid employment withholding taxes from the business, the business’s owners, its officers, and certain employees. In addition, the IRS is entitled to seek recovery from these parties at the same time.

Considerations for Determining Personal Liability for Unpaid Employment Taxes

To determine whether or not you may be personally liable for unpaid employment withholding taxes, it is important to consider whether you:

  1. were in control of the business.
  2. were able to make financial decisions to not pay the IRS.
  3. are an owner of the business.
  4. are an officer of the business.
  5. are an employee of the business.

If you receive a visit from an IRS Revenue Officer, it is important to seek guidance from an experienced legal professional. An attorney can help assess the facts and circumstances surrounding your tax problem in order to determine whether you may face personal liability for the unpaid tax debt. To get started learning more about tax problems and dealing with the IRS, we encourage you to check out our free guide, The Ultimate Survival Guide for IRS Problems.