Expert: Shirley McAllister, CPP, PHR - 2/12/2009

Question
I just recently started working for a company that had a prior secretary who did not keep payroll taxes current due to financial hardship in the company.  The IRS has not contacted the company. How is the best way to handle this?  Can I just use the EFTPS system to pay the taxes in full or will it allow me since it is from prior years?  I want to take care of this as soon as possible but I am a bit afraid of the consequences.  Thank you so much for your time and help.

Answer
You can pay the taxes throught the EFTPS system for prior years. You would also have to file all the 941 tax forms and the annual forms. You would have to check to see what was filed on the W-2 and w-3 forms. If no taxes were paid in prior years, than they should have been contacted by the IRS as there would have been a discrepency in the amount recorded on the W-2 and reported on the W-3 and the amount actually paid.

I think that you either have to start from where you are and pay the taxes current now, or you have to contact the IRS and find out what was actually reported for prior years. This could open up a can of worms.

If you pay prior years taxes you will be charged some huge penalties on the amounts because they are paid late. It could be in the thousands of dollars.

I think I would contact an attorney, pay a small fee to him and consult on how he thinks it would be best for you to handle this situation.

Shirley