| Gecko |
| (Carpal \'Tunnel) |
| 02/03/12 11:32 PM |
Re: Business questions
|
RG -
While the media and politics has made much of the 'rich' not paying their fair share...it is only a drop in the bucket when it comes to the $300 BILLION out there in UNPAID payroll taxes. As a result, the IRS has gotten VERY aggressive when it comes collections because of the personal tax liability. In other words...not only do they go after the company, but they can go after individuals...like company/corporate officers, members, principals, fiduciaries and...responsible parties.
When I got into accounting/bookkeeping some 30 years ago, I never though twice about signing tax forms or even being a signatory on the company's checking accounts. 1) it was logical for me to sign the tax forms since I had direct knowledge that the information contained within was 'true, correct and complete'; 2) it made paying bills easier; and 3) I was just an EMPLOYEE. That all changed when I moved to Arizona and ended up working for some companies that had some questionable (illegal) business practices. On one hand, I wanted to have high moral principals, but on the other...I needed to pay child support or end up in jail. So I made a few anonymous phone calls and found out:
- Even though it appears that you are only signing a declaratory statement when you sign the form, the instructions for the form are very clear on who is supposed to sign tax forms. So when a regular employee signs the form, they are declaring that they are an authorized representative and as such, they are accepting responsibility for the debt.
- Persons with nominal authority, but without actual authority are not responsible. As an example...I can prepare and sign the checks for payables, but cannot send them without prior approval. Or I have limited authority to go ahead and pay for 'petty cash' items, not to exceed say...$200.
The result: I never again signed any tax forms. And the only time I was a signatory on a checking account, is if it was a stated 'petty cash' account with documented limitations.
When payroll taxes are not paid, the IRS makes a list of possible folks who are potentially responsible. Those persons include owners, officers, members, and duly authorized representatives of the the business, along with those who sign tax forms and pay the bills.
Yes...for an employee thinking that they are just doing their job...it can be a real nightmare. A lot is going to depend on your sister's job description and duties, particularly in regard to payment of taxes and other creditors and knowledge that the taxes were owed and not paid.