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Is an officer in a company liable for unpaid payroll taxes?

Answers

Bill Quinn
Title: Member: CFO & Senior Consultant
Company: Blackfish Consulting, LLC
(Member: CFO & Senior Consultant, Blackfish Consulting, LLC) |

If you have check signing authority, or authority to designate/approve which checks get written, particularly if you're aware of the unpaid taxes. If you don't have such authority you may still have to prove you didn't. Even if you leave, it's possible they'll come after you for unpaid taxes that went unpaid under your watch . . . and it could be several years before they catch up with you. You may want to retain the services of an attorney who handles this type of matter. Best bet is to get those taxes paid ASAP or make arrangements to get them paid.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I'll add to Bill's excellent answer, Payroll Taxes also ARE NOT relived during bankruptcy proceedings. They will haunt you for ever.

Sara Laidlaw
Title: President
Company: Accounting Services Bureau Inc
LinkedIn Profile
(President, Accounting Services Bureau Inc) |

We had a nonprofit client in this situation. The IRS went after the entire board and management staff personally and the burden was on them to prove they were not a responsible party. The agent said that they could be held personally liable if they were privy to the financial statements and could see that the payroll taxes were not being paid. He assumed they had knowledge of regular payables being paid before trust taxes. (Rent, payroll, utilities) It may have just been a scare tactic, but it worked. The taxes got paid so I never found out what would have happened if they were not paid or if this guy was right. I do know that it cost some board members serious legal fees and scared the staff. We never sign a return or if we do, we have a 8655 on file and sign as a Reporting Agent only.

Trust taxes are serious business.

Topic Expert
Joan Varrone
Title: CFO
Company: Cloud Cruiser
LinkedIn Profile
(CFO, Cloud Cruiser) |

The CFO is responsible and this and sales tax are not relieved in bankruptcy. This is one area I would not fool around with.

Lawrence Lewandowski
Title: CFO, Controller, Director
Company: in-between
(CFO, Controller, Director, in-between) |

I agree with the statements presented. I have heard of states issuing demands for payment on officers who were no longer associated with the company in question. In one instance, the CFO had left the company several years before the year of the tax infraction. It was up to him to prove he was not associated with the company at that time by providing tax returns for two years prior and two years post the year of the assessment.

Becky Warburg
Title: Contract Accountant
Company: Premier Business Solutions
(Contract Accountant, Premier Business Solutions) |

Several years ago, I was working as a bookkeeper and looked into this. I was told by an attorney that I would be liable if taxes went unpaid even though I had no signing rights, etc. I left the company since there were other issues as well with the owners (fraud, etc), but have been sure to cover my bases since.

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