COVID-19 has had a serious impact on cashflow for many business owners. And they have had to put off paying some operating expenses. However, payroll taxes and sales taxes are considered trust funds and should continue to be paid unless they have the deferral that’s allowed through the Cares Act. Those, of course, aren’t forgiven, but just allowed to be paid over time.
But failing to pay the taxes that are still required, meaning those withheld from the employees and any other additional taxes that you’re continuously due to pay, have to be paid on their payroll schedule, whether you’re a monthly tax depositor or semi-weekly.
Keep in mind that anything withheld from the employees or customers is considered trust fund money. And those are the amounts that you have higher penalties for failing to pay on time. The IRS holds a responsible party as liable to pay the taxes.
If the company has not paid them on time, a responsible party is anyone who knew or should have known that taxes are due and willfully did not pay them. The trust fund penalty is 100% of the tax that is due and is assessed to a responsible party if the company does not pay their taxes on time.
If you have any questions regarding this, feel free to give us a call at (310) 534-5577, or [email protected]. We know that COVID has had some major cashflow issues on business owners, but we want to make sure you’re aware to continue to pay your payroll and sales taxes prior to any other operating expenses to avoid the responsible party being assessed the trust fund penalty.
