As a business owner, you have likely invested countless hours and considerable resources into watching your operation grow and even thrive beyond your expectations. Given this substantial investment of time, money and energy, it can be incredibly alarming to learn from the Internal Revenue Service that you are currently under investigation for -- or are being criminally charged with -- willfully failing to collect or pay over to the IRS the federal withholding from employees.
In today's post, the first in a series, we'll start taking a closer look at the employment tax requirements to which all employers are subject.
Federal tax requirements for employers
Federal law dictates that all employers must collect and remit federal income tax, and both Medicare and Social Security taxes from all employees, as well as pay a matching amount of these latter two taxes.
Specifically, employers are required to file an Employer's Quarterly Federal Tax Return, otherwise known as a Form 941, outlining both employment taxes and income withheld, and ensure that the corresponding amount is deposited in an authorized financial institution in accordance with Federal Tax Deposit Requirements.
In addition to covering their share of Medicare and Social Security taxes, employers are also solely responsible for what is known as the Federal Unemployment Tax Act (FUTA) tax, making sure that a FUTA return is filed annually and the necessary taxes remitted.
As you can already imagine, any failure to comply with these stringent employment tax requirements can subject an otherwise unsuspecting employer to not just steep civil sanctions, but also draconian criminal penalties.
In our next post on this subject, we'll spend some time examining the types of conduct that most often results in the IRS pursuing criminal charges related to employment taxes.
If you are an individual or a business that is being unjustly accused of having committing some manner of tax crime -- tax evasion, failure to file returns, making false statements on returns, etc. -- please contact the Law Offices of Horwitz & Citro, P.A. Our firm can explain the law, outline the charges against you and get to work building a compelling defense as soon as possible.
