IRS Payroll Tax Liability

Resolve IRS Payroll Issues

How to eliminate or reduce payroll tax debt and stop IRS enforcement

Payroll Tax Debt Assistance

What Is IRS Payroll Tax Liability?

When a business fails to pay federal payroll taxes, the IRS acts quickly and aggressively to collect what’s owed. These taxes are considered a top enforcement priority because they include money withheld from employees’ paychecks.

Resolving payroll tax debt can be complicated, and attempting to deal with the IRS alone often leads to costly mistakes. Our licensed tax professionals work directly with IRS Revenue Officers every day, using proven strategies to negotiate fair and manageable resolutions.

With M7 Tax, you’ll have experienced experts protecting your business, guiding every step, and giving you peace of mind through a clear, effective plan for compliance and recovery.

1. What should I do if the IRS visits my business?

If an IRS Revenue Officer visits your business about unpaid payroll taxes, stay calm and professional. You’re not required to let them beyond public areas unless they have a court order, which is rare. Do not provide detailed information or make payment promises on the spot. Let the officer know that your tax representative will respond on your behalf, then contact a licensed tax professional immediately. Acting quickly ensures your rights are protected and helps prevent enforcement actions like levies or asset seizures.

2. What does a Final Notice of Intent to Levy mean for my business?

A Final Notice of Intent to Levy is the IRS’s warning that it plans to seize your business’s assets — such as bank accounts, receivables, or property — if your tax debt is not resolved within a specific timeframe. Once this notice is issued, you have 30 days to act before enforcement begins. You can still stop the levy by contacting the IRS or having a tax professional request an appeal, set up a payment plan, or negotiate another form of tax relief.

3. What are trust fund and non-trust fund taxes?

Trust fund taxes are the portions of payroll tax withheld from employees’ paychecks — income tax, Social Security, and Medicare contributions. Because these funds belong to your employees, the IRS treats unpaid amounts very seriously. Non-trust fund taxes include the employer’s matching share of payroll taxes. While still important, these are considered the business’s responsibility rather than employee funds.

4. Who is personally liable for unpaid payroll taxes?

Under the IRS’s Trust Fund Recovery Penalty, individuals responsible for collecting or paying payroll taxes — such as business owners, officers, or payroll managers — can be held personally liable. The IRS may pursue these individuals even if the business closes. Working with a qualified tax professional can help you contest personal liability and negotiate a manageable resolution before penalties escalate.

5. Is there forgiveness for IRS back payroll taxes?

In some cases, yes. Businesses and individuals may qualify for tax debt relief programs such as an Offer in Compromise, which allows you to settle your payroll tax debt for less than the total owed. Eligibility depends on your financial situation, compliance history, and ability to pay. An experienced tax relief firm like M7 Tax Relief can assess your case and determine if you qualify for forgiveness or alternative resolution programs.

6. What if my business can’t pay its IRS payroll tax debt?

If your business can’t afford to pay its payroll tax debt in full, you still have options. The IRS may allow a structured installment agreement, grant Currently Not Collectible status, or consider a partial settlement through an Offer in Compromise. The key is communication and compliance — file all required returns and respond promptly to IRS notices. With expert representation, you can stop aggressive collection actions and secure a realistic plan to protect your business.

Why Trust M7 to Resolve Your IRS Payroll Tax Debt

  • ✅ E.A. Certified Expert with Extensive IRS and U.S. Tax Law Experience
  • ✅ Full IRS Compliance Support & Personalized Payroll Tax Solutions.
  • ✅ Trusted by entrepreneurs, investors, and high-net-worth individuals.
  • ✅ Proven success in reducing tax burdens and resolving IRS issues.

Tax Relief Services

  • Back Tax Return Filing
  • Offer in Compromise Negotiation
  • Revenue Officer Assistance
  • Payroll Tax Debt Assistance
  • IRS Levy Release
  • IRS Bank Levy Release
  • IRS Wage Levy Release
  • Federal Tax Lien Release
  • IRS Hardship Status
  • Tax Debt Expiration Advice
  • IRS Payment Plan Negotiation
  • Penalty Abatement Negotiation
  • Annual Tax Preparation
  • Innocent Spouse Application
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