An Indiana corporation contracted with a payroll service. The payroll service would withdraw, before payday, all funds for pay and taxes and put the money in the payroll services own checking account.
It seems the payroll service didn’t pay the taxes as it should have or when it should have and when the IRS started collecting levy’s, the payroll service used payroll wage money to pay the fines. The corporation had to hire another payroll service and deposit funds with it to meet payroll. The corporation filed a claim with the IRS because it was not the cause of the levy.
The corporation lost the case with the IRS. The IRS did not care if the payroll service messed up, the corporation was still ultimately responsible for taxes.
Lesson: My payroll service does not take your funds. You always know that the taxes ARE BEING PAID because it shows up on YOUR bank statement. You see exactly what is going on at all times.
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