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Old 10-06-2014, 09:27 AM
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Household Payroll Taxes

I have a client that has not filed a Schedule H in over 15 years. It was not done with the intent to escape payroll taxes. I need to know the what the statute of limitations are on payroll taxes and the penalties that will be assessed for failure to file Schedule H.

Can you please provide Internal Revenue Code sections to reference.


Last edited by mmckee26 : 10-06-2014 at 09:41 AM.


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Old 10-07-2014, 12:31 PM
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Quote:
Originally Posted by mmckee26 View Post


#1; I need to know the what the statute of limitations are on payroll taxes and the penalties that will be assessed for failure to file Schedule H.

#2;Can you please provide Internal Revenue Code sections to reference.
#1;I guess it depends(it is up to the IRS).Some tax experts say,” it is 10 years; The collection statute of limitations for unpaid federal payroll taxes is 10 years. The clock starts ticking on the date your payroll tax return is filed, which is the date the tax is assessed. If you file a payroll tax return late, the statute also starts late. For example, if you file a 2010 payroll return in 2012, your collection statute will run until 2022, not 2020. Since most federal payroll returns must be submitted quarterly, you’ll also have quarterly statute limitations, which means a separate statute will apply for each unpaid quarter; so, if you fail to file a payroll tax return, the IRS may perform its own, substitute tax assessment for you .In this instance, the 10-year collection period begins on the date the IRS assesses the debt balance. These substitute assessments are either based on payroll tax information you provided on a prior return, or on payroll tax information that is comparable for other companies within your industry. however, actually the IRS has NO limitations.The IRS can screw you over at any time of their choosing aslongas you owe money.
Note;when a company owes delinquent payroll taxes, the IRS only has a certain amount of time to collect. If the IRS doesn’t collect the balance within the statute, the rest is essentially written off, and any federal tax liens that have been filed for the balance are released. However, the general statutes can be extended when certain events take place during the collection period. The IRS can add time onto the regular collection statutes as a result of other actions that prohibit the IRS from collecting the payroll tax. For example, collection activity on your account is suspended when you file an application for an offer in compromise (settlement) of your payroll taxes, when you file an appeal on an IRS collection action or during a bankruptcy. The IRS can’t attempt to collect the tax from your company during any of these events. Instead, the IRS takes the time it is unable to collect from you and adds it on to the end of your statute. This can add anywhere from a couple of months to a couple of years on to your 10-year statute. These additions do not apply to the personal assessment statute for the trust fund portion.


#2;I guess there is no specific IRS pub for that; general SOL appliers to payroll tax SOL.You may try IRS section 6020(b).



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