Legal Question in Tax Law in Georgia

Re: Tax liability for employee filing federal withholding taxes

Sorry to take so long answering your question. Fortunately, the answer you already got from Randall Lenz is right on point -- you can fight this, but the fact that the IRS is already levying your wages means that the assessment has already occurred.

You can contest the assertion of what is called the "trust fund recovery penalty" by filing a claim for refund for what has already been taken from you. The TFRP is a "divisible" tax, so you don't need to pay the whole thing before filing a refund claim.

There is much more information about this TFRP penalty in an article I wrote for publication by the Maryland Society of Accoutants. You can find the article on my website at www.bjhaynes.com, and then go to the "articles" section.

This is a very difficult liability to have. Often the amounts are huge, and unlike an income tax debt it is not dischargeable in bankruptcy. If you were at all times under the full direction and control of others and had no independent duty to withhold and pay over the taxes, and no authority to make decisions about which creditors would be paid when there wasn't enough money to pay everyone, you should be able to get out from under this, but it will take some work. We have dealt with this issue for many clients over the past 25 years. If we can help you, please call or email me. The phone number and email address on posted on the website at www.bjhaynes.com.

Good luck!!

Re: Tax liability for employee filing federal withholding taxes

Yes, you can be held a "responsible person" for payroll taxes if you were a bookkeeper authorized to sign checks and you failed to pay the withholding taxes. You can try to fight it, although if you are having your wages garnished -this means you have received IRS notices but ignored them to your detriment. I do not know whether you can be helped at this point - take the IRS documents and notices to a tax professional to see if a solution is possible.