Payroll taxes are an area that is fraught with danger for business. If you have any disputes with the IRS or California’s Employment Development Department (EDD), our team of tax resolution attorneys, CPAs, and enrolled agents at Moskowitz, LLP can help.
If you do not deduct the appropriate amount of payroll taxes and pay the Internal Revenue Service (IRS) and the California EDD at the required intervals, you could be in significant legal jeopardy. You could be facing a large tax bill with significant penalties. You have legal rights as a taxpayer that come into play, including the ability to speak to government agencies and appeal any adverse findings in court.
Schedule an appointment as soon as possible at Moskowitz, LLP by calling us at (888) 829-3325 to both get down to the bottom of your case and help you plan a path forward. We are tenacious legal advocates for our clients when they have disagreements with the IRS or EDD.
Your business could be facing significant consequences in the event of a payroll tax dispute. Not only can the IRS or EDD require you to pay what they believe to be the proper amount of payroll taxes, but they can also impose significant penalties and charge interest. These penalties can increase over time if there are either repeated errors, or if the full amount is not paid immediately. Therefore, it is essential that you are proactive in addressing a payroll tax dispute that you may have with either the IRS or the EDD. If you wait too long, the penalties for your business can only increase.
Handling Payroll Disputes with the IRS
The first step in resolving any payroll tax dispute is understanding its nature. You may have received a notice from the IRS demanding back taxes and penalties. The IRS could send you a Notice CP161 when you have an unpaid balance due. They could send you a Notice CP220 when they are adjusting your return. These notices may give you information you need to know, but the notices generally will not tell you all the avenues you have to contest the assessments.
The notice may give you information about why the IRS believes that you still owe money, but you may need to figure out what exactly is happening. You must do research in your own systems and documentation to determine what happened on your end. Your tax resolution lawyer will need a complete picture before they can speak with the IRS. In addition, the IRS would want to see your complete records if you are attempting to resolve your dispute with them informally.
When you have a payroll tax dispute, you have several options to attempt to resolve it. First, you could negotiate with the agency in an attempt to clear up any misunderstanding or to reach an agreement. The notice you received could have been the result of a discrepancy that could be cleared up through communication with the IRS. You may be able to show the IRS why you do not owe the taxes, or they may be willing to reduce the amount you owe or the penalty that they have assessed. An experienced tax resolution professional can communicate with the IRS on your behalf. For what taxes you do owe, you may be able to make an offer in compromise to the IRS or agree to an installment plan.
Second, you can file an appeal of any adverse finding against you. It is not uncommon to attempt to negotiate first and then litigate if you cannot reach a resolution. As a taxpayer, you are entitled to due process and the right to be heard when you disagree with the IRS. You may have a limited amount of time to take your case to U.S. Tax Court, for IRS assessments, where the Court would make a determination about whether you owe tax and how much. A federal court hears any appeal of a Tax Court decision.
Payroll Tax Disputes with California
The process to handle a payroll tax dispute in California is largely similar to an IRS matter. You can request an audit conference with the state to discuss the matter and present your side in any dispute. You also have the option of taking your case to the Office of Tax Appeals. If you are unsuccessful at this level, you may be able to take your case to California Superior Court.
Contact a Tax Resolution Law Firm Now
Get a passionate advocate on your side today by speaking to our team of tax resolution attorneys, CPAs and enrolled agents at Moskowitz, LLP. If necessary, we also have U.S. Tax Court representation lawyers who can fight for your rights as a taxpayer. You can speak with an attorney by filling out an online contact form or by calling us today at (888) 829-3325.
