My Company owes the IRS a substantial amount of Payroll Tax. Can the IRS take money from my personal account to pay it?

Posted by Michael S. Anderson | Oct 01, 2013 | 0 Comments

My Company owes the IRS a substantial amount of Payroll Tax. My Company owes the IRS a substantial amount of Payroll Tax. Assuming that the business is a multi-member LLC or Corporation, it owes the Payroll Tax.  You don't…at least not yet.

As you know, the business withholds Social Security (FICA), Medicare and Income Tax from it's Employees' paychecks.  The business holds that money and adds some if it's own to the pot.  It sends the entire amount in to the IRS, or at least it is supposed to.

The IRS considers the withheld Income, FICA and Medicare tax to be “Trust Fund” money.  This means that the Business is or was holding it in “Trust” for the employee and was responsible for it.  The Trust Fund amount is about 50% of the total amount sent in.

Right now…you don't personally owe the IRS any money, only the Business does.  In order for the IRS to treat you as a debtor and thereby gain access to your personal assets, it has to make a formal determination that you are a “Responsible Person”.  This determination process usually begins with an interview and a review of documents like bank signature cards, corporate officer status etc.  Once the determination is made, the IRS issues a “proposed” assessment of just the Trust Fund amount only and against you personally.  You than have 60 days to submit a written protest.

Until the protest period expires, you don't owe anything.  Because you don't owe it personally, i.e. there has been no assessment, the IRS can't take any collection action.  It can't even file a tax lien against you.

If it is the case that you meet the criteria to be named a “Responsible Party”, the IRS will probably get around to proposing an assessment against you before the Statute of Limitations runs out on it's ability to do so.  That Statute period is 3 years from the date the 941 tax return is filed.  If the debt is going to be substantial, it is a good idea to discuss your options with experienced Counsel.

Michael Anderson, Tax Lawyer In Arizona Michael Anderson, Tax Lawyer In Arizona Written By:

Anderson Tax Law 2158 N. Gilbert Rd. Ste 101 Mesa, Arizona 85203

Phone: (480) 507-5985 Fax: (480) 507-5988 Email: [email protected] Website:

About the Author

Michael S. Anderson

Michael Anderson has been representing Arizona clients with tax debt problems for two decades and has helped his clients eliminate millions of dollars in tax debt. His tax debt practice is limited to helping individuals and the self-employed who have serious IRS problems.


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment


Aenean lacinia bibendum nulla sed consectetur. Donec sed odio dui. Maecenas sed diam eget risus varius blandit sit amet non magna. Nulla vitae elit libero, a pharetra augue. Curabitur blandit tempus porttitor. Morbi leo risus, porta ac consectetur ac, vestibulum at eros. Cras justo odio, dapibus ac facilisis in, egestas.

Contact Us Today

If you have an IRS problem, call our office and ask to speak with the Attorney about it. We like to discuss the situation on the phone for free to ask you some questions, answer some of yours, and to determine whether it may make sense for us to help. We’ve helped several thousand clients with tax debt problems over the last two decades. We’ll tell you the truth about your options and help you find the best one.