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payroll taxes not paid (1 viewing) (1) Guest
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TOPIC: payroll taxes not paid
#773
Jackie (User)
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payroll taxes not paid 9 Months, 3 Weeks ago Karma: 3  
client uses a payroll service to file payroll forms and pay the tax. The service takes the money, files the form but doesnt pay the tax. What can client do, other than sue the service. Client paid the money, but it didnt go to the iRS. Now client have penalties with the IRS.
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#777
Tomas (User)
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Re:payroll taxes not paid 9 Months, 3 Weeks ago Karma: 3  
your client is screwed. He is still responsible for the payroll taxes even the payroll company absconded with the $$. Your client can sue for the embezzelment and notify the IRS of the fraud.

Your client will be out money, but the payroll company will have the IRS on his ass!!
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#778
Brian (User)
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Re:payroll taxes not paid 9 Months, 3 Weeks ago Karma: 1  
if the payroll svc co is going bankrupt, then I would get an injunction and prohibit them from spending your client's funds. That is, recover what you can.
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#782
steve (Moderator)
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Re:payroll taxes not paid 9 Months, 3 Weeks ago Karma: 3  
The attached link is from the IRS website. It states that the "resposibile party" is always the employer, even when a payroll processing company is used.
http://www.irs.gov/businesses/small/article/0,,id=176943,00.html

If the payroll service provider has unlawfully misappropriated your funds, then you should quickly move to try and recover the funds by letter, lawsuit, and reporting the company to the taxing authorities.
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#783
Jackie (User)
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Re:payroll taxes not paid 9 Months, 3 Weeks ago Karma: 3  
client says the payroll company is gone. So, there is no one to sue?
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#786
Tomas (User)
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Re:payroll taxes not paid 9 Months, 3 Weeks ago Karma: 3  
the payroll company may not be collectible, but you can still report them to the IRS and state AG's office. Did the payroll company file a POA on your client? if so then their FEIN shoudl be on there and the IRS can track them.

Payroll companies usually have errors & omissions insurance....the problem is finding the company that holds the policy. Sucks for your client.
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