In a challenging California economy, TRI realizes that general contractors have found their work schedules shortened and the best jobs more competitive to bid on. After thriving in the first part of the decade, many of these companies have been forced to make tough decisions in order to keep their doors opens and the profits flowing. Recently, a major San Diego general contractor approached the Tax Resolution Institute because the recent difficulties had led to poor decisions in regards to unpaid payroll taxes that placed their future in jeopardy with IRS Revenue Officers.
When crunch time came and bills needed to be paid, the general contracting company found itself short of the cash necessary to cover the costs. Believing that a number of major payments were on the horizon, the principals made the mistake of taking money from the payroll tax trust fund owed to the IRS to make up for the lack of funds. What they did not realize is that messing with Payroll Tax payments to the IRS can often be the final straw that breaks the proverbial camel’s back.
IRS Payroll Tax Debts In San Diego
When the San Diego general contractor came to the Tax Resolution Institute, one bad move had snowballed into a full blown crisis. When the payments did not come in and the bills continued to pile up, the first choice to take from the trust fund made the second one easier to make. By the time the IRS caught up with the lack of payroll tax payments, there would be enough money in the company coffers to cover both the payroll tax debt and the resulting penalties. What the company did not realize was that the Trust Fund Recovery Penalty also is known as the 100% penalty. Not only would the trust fund have to be paid in total, there would be a staggering amount owed due to the Trust Fund Recovery Penalty plus the resulting interest. As time passed, the vigilant IRS Revenue Officers discovered the discrepancy and came after the San Diego company with a vengeance. As the largest collection agency in the world, the IRS never forgets. Sooner or later, if you have unpaid payroll taxes, the IRS will catch you and will prosecute to the fullest extent of the law.
Luckily, before the problem led to the San Diego general contractor being forced to close their doors and add to the unemployment rolls, the principals came to the Tax Resolution Institute. Although the payroll tax debt owed to the Internal Revenue Service was well into five figures (we cannot be specific because TRI always protects the anonymity and privacy of our clients), the tax experts at the Tax Resolution Institute were able to use their experience and expertise to work out a viable and beneficial deal for the San Diego general contractor. The Trust Fund Recovery Penalty did not end up destroying the future of the company.
In the end, the general contractor survived the payroll tax crisis with the ability to keep their doors open. As a result, their workers are continuing to build today, helping keep the revival of the California economy moving forward and renewing the prosperity of the San Diego business world. If your company has unpaid payroll taxes and is in a payroll tax crisis with the IRS, please contact the Tax Resolution Institute so you can maintain your future productivity and profitability.
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