Do you really want to irritate the IRS? Start a business in Oklahoma, say with 20 or so employees, and pay them a weekly or biweekly salary. Withhold all the necessary taxes—state, local, federal, Social Security, etc.—but instead of forwarding these funds to the government, apply them to your bottom line or even use them to pay your own salary. Repeat for years on end, until you become a habitual payroll “pyramider” in the eyes of the IRS, and they will come after you with the most dangerous weapon in its arsenal: the Trust Fund Recovery Penalty.
Using the Trust Fund Recovery Penalty, the IRS can hold you, your senior executives, or anyone with administrative authority (also known as “signing power”) liable for your illegally withheld payroll taxes, as well as substantial penalties ranging up to 100 percent of the assessed amount.
Hiding behind your corporate or limited-liability business status will be of no use, because the IRS can attempt to collect its taxes by seizing your personal bank accounts, levying your property, or taking and selling your assets (such as your home or car).
In addition, if you're an especially egregious payroll bandit, the IRS may seek to level criminal penalties, and you may find yourself spending 10 years in your local minimum-security prison.
Scared yet? You should be. If you are an Oklahoma business owner who has been remiss in forwarding your payroll taxes, call the Oklahoma payroll tax experts at Travis W. Watkins, PC for a free consultation. We will start negotiating with the IRS as soon as possible, in an attempt to secure the least possible penalty for your infraction.