Payroll Tax Relief for Businesses — MD, DC & VA

Payroll taxes — the employee withholding and employer contributions a business is required to remit to the IRS — are treated differently from other tax debt. When a business fails to remit payroll taxes, the IRS views it as using employee trust fund money to finance the business. The consequences are severe.

Trust Fund Recovery Penalty (TFRP): The IRS can assess the Trust Fund Recovery Penalty against any person who was responsible for collecting and paying over payroll taxes and who willfully failed to do so. This means the penalty follows individuals personally — it doesn't disappear if the business closes. As an attorney, we can challenge TFRP assessments and represent you in collection proceedings.

How serious is payroll tax debt?

• The IRS prioritizes payroll tax collection over most other enforcement
• Penalties and interest compound quickly on trust fund balances
• Revenue Officers (field agents) are commonly assigned to payroll tax cases
• Business assets and personal assets of responsible individuals are both at risk

Resolution options for payroll tax:

• Installment agreements for the business and/or individuals assessed the TFRP
• Offer in Compromise for qualifying businesses
• Penalty abatement for accrued penalties
• Challenge to the TFRP assessment if the responsible person determination is incorrect

State payroll taxes: Maryland, Virginia, and DC all have withholding tax requirements. State payroll tax defaults operate separately from federal and carry their own penalties. We handle state and federal payroll tax issues together.