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Time to Outsource Your Payroll Processing?

On behalf of Kundra & Associates, P.C. posted in Tax Controversy

If you own a small business, you have many demands on your time. You have all the responsibilities as owner and have to make all of the significant decisions for your business. Whether your business is a medical practice, a software provider or a construction company, the demands on your time are virtually unlimited. To operate a successful business, you need focus on where you greatest strengths lie.

If your business has grown, your payroll is likely to have grown in both size and complexity. If it is time to hire outside assistance with your payroll, you should keep in mind the some of the risks that accompany outsourcing that function.

As part of its work, your payroll processor can be responsible under its contract for paying your payroll taxes. However, while they may have an obligation as part of their service, as the business owner, you remain ultimately responsible for the accurate payment of these taxes.

If your provider fails to pay your payroll taxes, the Internal Revenue Service will hold both of you responsible. The tax penalties and interest can be significant, so you need to act soon if you know of or suspect any missing payments.

At this point, you may need legal assistance in dealing with the taxes and developing a repayment plan the IRS finds acceptable. While the IRS is generally not unreasonable in these circumstances, it helps to have knowledgeable counsel to negotiate a solution.

Source: Business News Daily, "Outsourcing Your Payroll? Avoid These Risks," Brittney Helmrich, June 23, 2014

Tags: Tax Controversy

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