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Protecting your business from payroll tax liabilities

On Behalf of | Jan 17, 2024 | Tax |

Owning and operating a business can be a very rewarding experience and a major goal for many. While there are many benefits there are also a multitude of responsibilities and laws and regulations that must be complied with.

As an employer in Texas, there are many requirements when it comes to handling the payroll for employees. This goes beyond paying the wage or salary of their employees and includes paying payroll taxes to the Internal Revenue Service or IRS. For small businesses, this could get problematic, as it is easy to fall behind on these payments. As such, it is important to be aware of payroll tax liabilities and the legal options available to address them.

Payroll tax liabilities

At David Coffin, PLLC, our law firm understands the complexities payroll tax liabilities can bring to the table. That is why our attorneys take the time to work personally and diligently with our clients, so they fully understand their situation, options and resolutions.

Payroll taxes include both an employer’s portion of the taxes as well as the taxes an employer collects on behalf of their employees. Businesses are required to pay these to the IRS; however, some fall behind on this obligation. And if a business is having difficulty catching up, this could result in payroll tax liabilities.


Payroll tax liabilities differ from income tax liabilities. While both can result in penalties for the failure to pay, the penalties for payroll tax liabilities are more severe. Thus, if you have received an IRS Letter 1153, which is a notice that a trust fund recovery penalty has been proposed against you, it is imperative that you take immediate action to protect yourself.

It is important to note that these penalties could be imposed against the company officers as well as anyone who has check signing authority on behalf of the company. Additionally, if this penalty has been assessed, it is often very difficult to avoid the collections efforts by the IRS.

In effort to avoid negative financial and personal consequences, it is vital that you take timely action to protect yourself and your business from payroll tax liabilities. These matters can be complex and time sensitive, making it important to seek guidance from a legal professional.