Officers' Personal Liability for Their Company's Unpaid Taxes

Posted by Sheridan Smith on Fri, Nov 18, 2011 @ 02:57 PM

Many a cash-strapped company fails to deposit its payroll taxes. Unlike other creditors, Federal and state taxing authorities are not at the company’s door demanding their money. The company resolves to pay the tax deficiencies later, when cash is available. Yet that day never arrives, and the problem only compounds. Eventually, tax collectors will appear and seek to collect the tax, penalties, and interest owing by the company. If immediate payment cannot be effected, the tax collectors will enter the company into an installment agreement. Liens in the company’s property arise in favor of the taxing authorities for the amount of the tax, penalties, and interest due them. The taxing authorities will record notices of their tax liens in the register of deeds’ office of the county where the company is located, disabling the company from selling or mortgaging interests in real property, and impairing the company’s credit. If the company does not cooperate with the taxing authorities, the taxing authorities will seize (“levy”) the company’s property.  To read the full article, please click here

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Topics: Liability, Company, taxes