All check signers on Company Bank Accounts can be Held responsible for Payroll Taxes!
If you are a check signer and a responsible party an the company checking account, it is your responsibility to make sure all Payroll taxes are paid to the IRS on time.
Sometimes businesses get behind on payroll taxes due to cash flow problems. The penalties and interest assessed by the IRS are excessive for this type of delinquency. This problem becomes worse with IRS penalties and interest, and the total amount owed can grow by 50% to 75% in a short period of time.
If the Company is now in cash flow trouble and approaching the DANGER ZONE, it may never be able to pay off the total amount owing. Each check signer may be held personally responsible for the payroll taxes. And we mean EVERYONE of the check signers listed on the bank signature card. This often includes spouses, secretaries, employees, relatives, office managers, or yourself.
Before the Company gets in the Danger Zone, you should get all non-essential signers deleted from the bank signature card.
The IRS takes a very serious approach to collecting delinquent Payroll taxes and may levy or seize company assets in short order. The best advice we can give to you if you find yourself in this situation is NOT to meet with the IRS Revenue Officer who call or comes to the door to collect these taxes. Often, how you answer their first 5-10 questions will determine whether you stay in business and if you of others will become personally responsible for the payroll taxes. One of the most important services we offer our clients is to meet with the IRS ourselves. This always allows our client to concentrate on running the business and improving cash flow.
Don’t meet with an IRS agent yourself. Remember: He knows more than you, and his job is to collect taxes from you.