Payroll taxes are withheld from employees’ wages by their employers. These employers then send the taxes that are withheld to the federal government. Taxes that are taken out of employees’ pay include the Social Security (FICA) tax and Medicare tax. These taxes provide benefits for various segments of society, including: retired workers, the disabled, and the dependents of both. The Medicare tax provides medical benefits for certain individuals when they reach 65 years of age. Workers, retired workers, and the spouses of these individuals are eligible to receive Medicare benefits when they meet the aforementioned age requirement. Federal income taxes, on the other hand, provide for national programs such as defense, community development and law enforcement.

Payroll taxes are set at specified rates by the IRS. For 2010, the Social Security tax rate is 6.2 percent and the Medicare tax rate is 1.45 percent. Employees complete Form W-4, Employee’s Withholding Allowance Certificate, which is then used by employers to compute the amount of income tax to withhold from each employee.

Payroll taxes create a fiduciary liabilty for the employer.  Hence payroll taxes are also known as trust fund taxs because Section 7501(a) requires employers to hold these monies “in a special fund for in trust” until the employers pay them to the U.S. Government.  Under Section 6672 there is a 100 percent penalty for nonpayment of the taxes withheld from employees’ pay.  In addition to the 100 percent civil penalty the Internal Revenue Code also imposes criminal penalties under Sections 7201 and 7202. 

Due to the harsh consequences associated with payroll taxes which were established to deter the nonpayment of trust fund taxes, business owners need to be especially careful when determining the characterization  of worker status.  As a result of the enormous exposure and potential liability, business owners face, it is critical that you correctly determine whether individual providing services is an employee or an independent contractor.   

At Bucci Law Offices, our tax attorneys can help you limit your exposure by determining whether employee or independent contractor status is the appropriate classification.  Our tax attorneys can analyze your current and past payroll tax records and inform you about the various payroll tax options that are currently available in order to help you decide which form of payroll tax withholding is most suitable to balance your financial needs and IRS obligations.   Bucci Law Offices can be your tax advocate and fight for your rights! 

How Can Bucci Law Offices Help?

Dealing with the IRS alone can be very intimidating, often times, resulting in nothing more than increased interest and penalties being assessed against you.  We can eliminate this stress for you.  You can stop answering harassing phone calls and receiving letters from the IRS.  Instead, you can have us, your trusted partner, deal with the IRS on your behalf and help you get the results you need.  The attorneys at Bucci Law Offices have extensive experience with the IRS and can navigate through their rules and regulations, while advising you of your best possible options for resolving your IRS problems.

Remember, IRS problems do not go away on their own and usually require immediate attention.  You need someone in your corner to protect your rights and interests – we can do just that.  Contact Bucci Law Offices today to get the help you need and deserve.

Call Bucci Law Offices now at 954-764-4440 or 877-764-4440 to learn more about how we can help you solve your tax problems!