Under current IRS procedures, the IRS can take up to 3 months to determine and notify a business if they are delinquent on their payroll taxes. The IRS recently announced that they plan to introduce a new system by the beginning of 2017 that will notify IRS agents in a matter of days if an employer has delinquent payroll taxes.photo of Income tax papers

Under the Early Interaction Initiative, the IRS administrators hope to identify employers who are falling behind on their payroll tax payments, help employers with compliance and thus avoid excessive interest and penalties. With the current system, high dollar delinquent payroll taxes that are 3 months late can be subject to significant penalty charges. This new system will notify the IRS within 72 hours if an expected payment is late and will help reduce those penalties. Just as importantly, this new system will also help a resource strapped IRS agency ensure prompt payroll tax collection and deal with those employers who have difficulties managing payroll tax submission or are willfully not submitting payroll taxes.

The IRS collects 93% of all federal revenue. 70% of that 93% is collected via payroll tax withholding and submission. According to IRS data, as of September 2015, the amount of unpaid payroll taxes related to Form 941 reporting was approximately $59 billion. In the meantime, the number of IRS revenue officers has declined 38% since 2010, thus hindering the IRS ‘s ability to collect those unpaid taxes.

According to IRS administrators, this new detection system will significantly enhance the agency’s ability to help employers manage a delinquency, pay unpaid taxes and ensure compliance. It will also help revenue officers determine much more rapidly if a business is intentionally failing to submit employee’s withheld taxes. The Advi$or has noted an increase in the number of successful prosecutions of businesses that “borrowed” employee’s withholdings with no ability or intention to make the amount whole with the IRS. As administrators noted, this new tool will give them the ability to better monitor non-compliant business practices and delinquent payroll taxes and seek both civil and criminal penalties along with incarceration where appropriate.


About Time & Pay:

Time & Pay is a professional payroll service provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States. Founded in 1992, Time & Pay provides businesses with complete payroll services , guaranteed payroll tax compliance, automated time and attendance systems and services, pay-as-you-go worker’s comphuman resource management systems and services, and more. We provide our customers with the cost effective tools you need to better manage your payroll, your employees and your business. Time & Pay’s services guarantee you will save money, time and aggravation and we back them up with the customer service you expect and deserve. Contact Us today to learn why business owners throughout the country are saying:

“Time & Pay! Why would you do payroll and timekeeping any other way?”

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