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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7331
Experience:  15years with H & R Block. Divisional leader, Instructor
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We are a small business that pays a CPA and his office to do

Resolved Question:

We are a small business that pays a CPA and his office to do payroll which includes submitting payroll forms such as 941's/940's. This office also does our W-2's. They made a mistake on W-2's for 2010,2011. Social Security has caught the mistake. IRS payroll and SS payroll is different? Resulting in our employes earning money that wasnt reported on their W-2's. The company has paid the correct taxes for employees and paid the employees wages. Who is responsible to refile taxes and pay taxes,penalities that are due?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
It is generally the responsibility of the taxpayer (be that an individual or a business entity) for any taxes that are due. In the area of trust fund taxes (payroll) the third party may be held liable.

IRC Section 6672 provides that any “responsible person” required to collect and remit trust fund taxes shall be liable for a penalty equal to the amount of the tax that was to be withheld and paid to the IRS (the 100% penalty). The new name for the penalty is “the trust fund recovery penalty.” A responsible person can be any officer or employee of a corporation who is responsible for accounting for and paying the taxes to the IRS.
IRC section 6672 added the accountant in management as another person of liability for the trust fund portion of payroll taxes.

All that being said, perhaps you would want to first work with your CPA to see if they carry insurance that covers this type of mistake. The IRS is going to come to the employer but the CPA or accounting firm hired should work with the employer for satisfaction.

Robin D :

I hope this is information is helpful

Customer:

let me clarify the company has submitted the correct taxes for 2011,2012 but the W-2'S prepared by cpa's office didnt include overtime pd to employees. how is it when we pay a cpa to do our payroll and the employees pay their taxes based off of their W-2's that this becomes our responsibilty. we have filed and paid what we collected. the employees are the ones who need to refile their taxes due to the cpa's mistake. why is it not the cpa's responsibilty to fix his mistake.

Robin D :

The CPA should most certainly correct the filings on the W2s. The employees really are responsible to file their corrected returns. That is not your responsibility as their employer.

Robin D :

The CPA could offer to complete the amended returns for the employees.

Robin D :

I do not know how many you are talking about but they may not feel comfortable having the CPA do this (based on past performance).

Robin D :

Corrected W2s and employees having to amend their returns is not an unusual occurrence (except when it happens to the individual on a personal level) it happens much more than one realizes.

Customer:

cpa has offered to complete amended returns, but as you just stated do they trust him to do that. let me be sure i understand that this is in no way the company's responsibilty to pat taxed/interest due.

Robin D :

Not for the employees no

Robin D :

They bare their own responsibility to check on the accuracy of their reported income.

Robin D :

If you reported all to the CPA and deposited the correct withholding but only the W2s were not correct, teh CPA should fix that and the employees must amend

Customer:

thank you.

Robin D :

You are most welcome

Robin D :

Your positive rating is always thanks enough.

Customer:

can i print this conversation woth you?

Robin D :

Yes

Robin D :

After you rate you shoudl see a SHAre button

Robin D :

should see

Robin D :

sorry

Robin D :

Hover on that and print is an option

Customer:

thanks again

Robin D :

When you visit your question homepage, you’ll see a link to request me again. This link displays and works whether I am online or offline.

Robin D :

Best wishes

Robin D :

Did you need more assistance?

Customer:

no

Robin D :

Ok

Robin D :

Just making sure

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7331
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 6 other Tax Specialists are ready to help you

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