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Insight Law Firm | South King County Tax Attorney Blog | Renton Tax Attorney | Kent Tax Attorney | Auburn Tax Attorney | Maple Valley Tax Attorney | Covington Tax Attorney | Bonney Lake Tax Attorney | wa | IRS June 9, 2012

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Insight Law – Kent, Auburn, Maple Valley And Renton Tax Attorney

Dedicated  Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing.

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney link below to visit our firm website.

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Insight Law – South King County Location:

15111 8th Ave Suite 302
Burien, WA 98166

(206)466-5300

Bellevue Location:

800 Bellevue Way NE Suite 400
Bellevue, WA. 98004
 
( 425)462-6390

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Trust Fund Penalty | Employment Taxes – A Business Owners Worst Nightmare: Personal Liability for Employment Taxes May 13, 2012

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Employers really work for Uncle Sam, collecting the IRS’ taxes through the withholding system. (States with income tax laws also impose wage withholding.) By law, employers make three kinds of payments to the IRS after each payday. The check (or electronic transfer) they send covers (1) the income tax withheld from your paycheck, (2) the Social Security and Medicare tax also withheld, and (3) the employer’s matching Social Security/Medicare payment. The first two items – the withheld portions – are known as the “trust fund” part of the tax because a special statute imposes a trust on those withheld funds until the employer pays them to the IRS. The money doesn’t have to be put in a separate bank account, but it’s automatically deemed “in trust” from the instant your employer withholds it from your pay. In a perfect world, the money is there.

But the world is far from perfect. If the employer just doesn’t pay, or decides to pocket that money, employees get full credit on their taxes, but the IRS is still short the money. So it uses a special weapon thousands of times each year, the Trust Fund Recovery Penalty.

This penalty makes the people who were responsible for the nonpayment personally liable for 100 percent of the money that was withheld but not paid over to the IRS, that is, 100 percent of the unpaid income withheld and Social Security/Medicare tax. (The penalty does not apply to the employer’s share of Social Security/Medicare.)

Of course, the corporation is also liable, and the IRS goes after that primary payor first. But the Trust Fund Recovery Penalty makes the responsible persons “guarantee” the corporation’s payment, at least in part. This penalty is a debt that can follow you for at least ten years, or the rest of your life, whichever comes first. The limited liability you personally enjoy from most corporate debts does not apply against this federal law. On top of that, you cannot discharge this penalty by filing personal bankruptcy, as you can with most personal debts.

This Trust Fund Recovery Penalty can be a major tragedy for the businessperson. Most business owners want to stay in business and prosper, but when money gets too tight, many take a chance by paying the squeaky wheels. The IRS is like a hibernating bear in these payroll tax cases. It wakes up late, sometimes years after the first default, but it also wakes up very hungry and aggressive. On top of that, the longer the default goes on, the easier it is to continue and the harder it is to feel that you can ever catch up.

But you can fight the imposition of this “penalty” (it’s really just a substitute for part of the tax the corporation did not pay) in several ways.The law allows you to do this, even before the IRS officially imposes it. The law in this field is very extensive, mostly through cases tried in the courts. You can argue that you were not truly responsible, that some other person was, that you did not know, and a range of other defenses that are technical in nature but that work if you prove them.

Call our firm at (206)397-4780, or click the Tax Lawyer link below to visit our website.

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Insight Law Firm | North King County Tax Attorney Blog | Lynnwood Tax Attorney | Shoreline Tax Attorney | Edmonds Tax Attorney | Mountlake Terrace Tax Attorney | Mercer Island Tax Attorney | Northgate Tax Attorney | wa | IRS May 13, 2012

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Insight Law – Lynnwood, Edmonds, Shoreline and Mukilteo Tax Attorney

Dedicated King And Snohomish County Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing.

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney link below to visit our firm website.

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Insight Law – Seattle Location:

Insight Law Firm | Eastside Tax Attorney Blog | Kirkland Tax Attorney | Redmond Tax Attorney | Bothell Tax Attorney | Sammamish Tax Attorney | Issaquah Tax Attorney | North Bend Tax Attorney | Fairwood Tax Attorney | wa | IRS May 13, 2012

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Insight Law – Kirkland, Issaquah, Bothell, And Redmond Tax Attorney

Dedicated and Experienced King And Snohomish Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing.

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney link below to visit our firm website.

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Insight Law – Bellevue Location:

 800 Bellevue Way NE Suite 400
Bellevue, WA. 98004

(425)462-6390

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Issaquah Sales and Business and Occupation(B&O) Tax Audit Attorney
North Bend Business Tax Attorney
Sammamish IRS Tax Penalty Relief Attorney
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Insight Law Firm | Snohomish County Tax Attorney Blog | Lake Stevens Tax Attorney | Mill Creek Tax Attorney | Stanwood Tax Attorney | Snohomish Tax Attorney | Marysville Tax Attorney | Arlington Tax Attorney | Granite Falls Tax Attorney | wa | IRS May 13, 2012

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Insight Law – Mill Creek, Lake Stevens, Marysville, and Snohomish Tax Attorney

Dedicated King And Snohomish County Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing.

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney link the below to visit our firm website.

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Insight Law – Everett Location:

Insight Law Firm | Washington State Business Tax Attorney Blog | Yakima Tax Attorney | Spokane Tax Attorney | Vancouver Tax Attorney | Wenatchee Tax Attorney | Tri Cities Tax Attorney | Ellensburg Tax Attorney | WA | IRS May 12, 2012

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Insight Law – Spokane, Vancouver, Yakima, And Washington State Tax Attorney

Dedicated King And Snohomish County Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing. (877)343-4358

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click on the Tax Attorney link below to visit our firm website.

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Spokane IRS Tax Levy and Wage Garnishment Lawyer
Wenatchee Tax Court Attorney
Tri Cities IRS Innocent Spouse Relief Attorney
Vancouver, wa Sales and Business and Occupation(B&O) Tax Audit Attorney
Spokane Business Tax Attorney
Ellensburg IRS Tax Penalty Relief Attorney
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Insight Law Firm | Puget Sound Tax Attorney Blog | Bremerton Tax Attorney | Vashon Island Tax Attorney | Bainbridge Island Tax Attorney | Whidbey Island Tax Attorney | Gig Harbor Tax Attorney | Port Orchard Tax Attorney | Port Angeles Tax Attorney | WA | IRS May 12, 2012

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Insight Law – Bainbridge, Vashon, Bremerton, And Gig Harbor Tax Attorney

Dedicated King And Snohomish County Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing. (877)343-4358

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney Link Below to visit our firm website.

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Bremerton IRS Innocent Spouse Relief Attorney
Port Orchard Sales and Business and Occupation(B&O) Tax Audit Attorney
Gig Harbor Business Tax Attorney
Port Angeles IRS Tax Penalty Relief Attorney
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Insight Law Firm | Tacoma Tax Attorney Blog | Corporate & Business Tax Lawyer Tacoma WA | IRS | DOR | Audit | Levy | Lien | Garnishment May 12, 2012

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Insight Law – Tacoma Tax Attorneys

Dedicated Seattle And Tacoma Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing. (877)343-4358

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney Link below to visit our firm website.

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Insight Law Firm | Southwest King County Tax Attorney Blog | Federal Way Tax Attorney | Des Moines Tax Attorney | Burien Tax Attorney | West Seattle Tax Attorney | Seatac Tax Attorney | Tukwila Tax Attorney | wa | IRS May 12, 2012

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Insight Law – Tukwila, Des Moines, Seatac & Federal Way Tax Attorney

Dedicated South King County Tax Law Attorney Firm Representing Businesses And Individuals Throughout Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing.

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney link below to visit our website.

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Insight Law – South King County Location:

15111 8th Ave Suite 302
Burien, WA 98166

(206)466-5300

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Insight Law Firm | Seattle Tax Attorney Blog | Corporate & Business Tax Lawyer Seattle wa | IRS | DOR | Audit | Lien | Levy | Garnishment April 23, 2012

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Insight Law – Seattle Tax Attorneys

Dedicated Seattle Tax Law Attorney Firm Representing Businesses And Individuals Throughout Seattle and Washington State. We provide top quality service and client centric communication for a great value.  Four Locations For Your convenience. Call Today For a Free Consultation. If we cannot effectively resolve your tax issue, you will owe us nothing.

Click “Home” To Read Our Blog. Click “About” To Learn More About Our Firm. Click the Tax Attorney link below to visit our firm website.

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Insight Law – Seattle Location