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Employment Tax Reporting

Virginia Tax  Lawyer Advising Businesses on Employment Tax Reporting

Employment tax laws are very technical and can cause serious problems for companies of all sizes and shapes.  When a business fails to comply with IRS rules and procedures, the business can face harsh fines and penalties and may even be subject to an IRS audit or examination.  Businesses looking to avoid employment tax problems or seeking to resolve an existing tax law dispute, should seek advice from an experienced employment tax attorney.  A skilled tax law firm can help you understand your obligations and make certain you are taking the right steps to bring your company into full compliance with all employment tax reporting requirements.

The attorneys at Thorn Law Group have decades of combined experience representing small and mid-sized corporations, partnerships, self-employed individuals and other entities in both routine and complex employment tax matters.  Our lawyers are well-known for providing strategic advice and direction to businesses operating in the Virginia region and around the nation.  We are a strong tax law team that aims to resolve tax law disputes quickly and favorably while protecting our clients’ important business interests. 

Employment Tax Reporting Rules

Internal Revenue Code rules require business owners to report specific employment information to the IRS.  Business owners must provide detailed information about the wages, tips and other compensation they pay to their workers by filing required tax forms with the IRS.  Business owners must also withhold employment taxes (federal income taxes and Social Security and Medicare taxes) from the compensation they pay to their employees.  The IRS requires businesses to report the employment taxes they have withheld from their workers’ paychecks on Form 941 (Employer’s Quarterly Federal Tax Return).  

When a business withholds employment taxes, the business must deposit the taxes with an authorized bank or financial institution.  Federal income tax and Social Security and Medicare tax deposits must be made in accordance with strict IRS deposit schedules.  When a business fails to make a timely employment tax deposit it may be subject to an IRS failure-to-deposit penalty, ranging from 2 percent of the unpaid taxes owed up to 15 percent where taxes are still unpaid after the 10th day following the receipt of notice and demand from the IRS. 

The IRS can also impose penalties upon employers that fail to comply with employment tax reporting requirements.  When an employer fails to file a tax return by the required due date, the IRS may impose a failure-to-file penalty.  This penalty is generally calculated at the rate of 5 percent per month on the unpaid taxes the employer owes to the federal government up to a cap of 25 percent.  The IRS can increase the penalty to 15 percent per month up to a cap of 75 percent where the failure to file was due to employer fraud. 

Contact Thorn Law Group

If you have questions about IRS employment tax reporting obligations or are concerned that your business may be targeted for an IRS audit, contact Thorn Law Group today.  You can schedule a confidential consultation with our experienced tax law team by calling our Virginia office at 703-752-3752 or emailing Kevin E. Thorn, Managing Partner of Thorn Law Group at ket@thornlawgroup.com.

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