Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

Ok so I red an employee last year months, had workers

Customer Question
Ok so I hired an...
Ok so I hired an employee last year for several months, had workers compensation and paid paychecks with federal and state witholding, but really didn't have the cash flow to support it so I ended up having to let him go. I have not yet filed or paid any state or federal taxes, and I have not yet given him his W-2 (I realize that I have missed the January 31 deadline for this) I already had an FEIN but as I was going through my quickbooks process to generate his W-2 I found out that I needed a State of California Employer number, so I have applied for that. My question is, what kind of nightmare am I looking at as far as paying these taxes after the fact? His gross wages for the months that I employed him last year are $8,575. Am I going to be ok? What kind of trouble am I looking at?
Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
2/22/2016
Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,795
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified

Q: Am I going to be ok? What kind of trouble am I looking at?

A: Sorry, but yes, you're in a bit of a jam. Regarding the employment taxes, you are looking at failure to file and failure to penalties. Regarding the late filing of the W2, you're looking at a $50 penalty. SEE BELOW:

--------------------------

4.23.9.9 (05-14-2008)
Assertion of Failure to File Penalty

  1. IRC 6651(a)(1) imposes a penalty for the failure to file a tax return by its required due date (determined with regard to any extension of time for filing). The penalty rate is 5% per month up to a maximum of 25%, computed on the amount of unpaid tax. The penalty is assessed unless the taxpayer can show that the failure to file was due to "reasonable cause" and not due to willful neglect. See IRM 20.1.2.3, Failure to File a Tax Return IRC section 6651(a)(1).

  2. For reduction of the delinquency penalty rate when it is combined with the failure to pay penalty, see IRM 4.23.9.10.

  3. IRC 6651(f) provides that if the failure to file is fraudulent, the penalty increases to 15% per month up to a maximum of 75%.

  4. Generally, there is no provision for an extension of time to file an employment tax return under IRC 6081. However, deadline extensions may be granted for a Form 940 under Treas. Reg. 31.6081(a)-1(b) and for all employment tax returns under combat zone (IRC 7508) and disaster relief (IRC 7508A) provisions.

4.23.9.10 (05-14-2008)
Assertion of Failure to Pay Penalty

REFERENCE SOURCE:

https://www.irs.gov/irm/part4/irm_04-023-009.html#d0e495

Let me know if I can be of further assistance to you regarding this matter.

  1. IRC 6651(a)(2) provides a penalty for failure to pay tax shown on returns, unless the failure to pay is due to reasonable cause and not due to willful neglect. IRC 6651(a)(3) provides a similar penalty for failure to pay tax not shown on the return within 21 days from the date of notice and demand for the tax (10 business days if the amount equals or exceeds $100,000). See IRM 20.1.2.4, Failure to Pay Tax IRC section 6651(a)(2), and IRM 20.1.2.5, Failure to Pay Tax IRC section 6651(a)(3), for more information.

  2. When a delinquent return is received from a taxpayer during an examination, the examiner will determine whether the failure to pay penalty under IRC 6651(a)(2) should be asserted. The examiner’s recommendation for the assertion or non-assertion of the penalty will accompany each delinquent return sent to the Campus. If the delinquent return is received from the taxpayer with remittance, the examiner will solicit payment of the penalty when applicable.

  3. The operating division which conducted the examination is solely responsible for determining whether the failure to pay penalty is applicable on delinquent returns secured. This procedure also applies when a "Substitute for Return" is prepared in a case where a delinquent return was due from the taxpayer.

  4. The penalty imposed by IRC 6651(a)(2) is one-half of 1% for each month or fraction thereof during which the failure to pay continues, limited to a maximum of 25% of the tax shown on the return (or required to be shown and which is not shown after notice and demand) reduced by:

    1. Any part of the tax which is paid on or before the beginning of such month and

    2. Any credit against the tax which may be claimed on the return.

     

  5. In cases subject to the failure to file and failure to pay penalties special provisions apply. No taxpayer will be subject to more than a 5% penalty (both penalties combined) in any one month, limited to a maximum 25%. In these cases the delinquency penalty will be computed at 41/2% per month and the failure to pay penalty at one-half of 1% per month.

  6. See IRC 6651(d) for certain situations in which the failure to pay penalty is increased to 1%.

  7. A failure to pay will generally be considered to be due to reasonable cause to the extent that the taxpayer has made a satisfactory showing that he exercised ordinary business care and prudence in providing for payment of his tax liability and was nevertheless either unable to pay the tax or would suffer an undue hardship if he paid on the due date. Treas. Reg.(###) ###-####1(c). See also Policy Statement 2–7, Reasonable cause for late filing of return or failure to deposit or pay tax when due, and IRM 20.1.1, Introduction and Penalty Relief, in the Penalty Handbook.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,795
4,795 Satisfied Customers
Experience: 3+ decades of varied tax industry exp. Tax Biz owner

Tax.appeal.168 is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I am trying to figure out how much, if any of my wife's
I am trying to figure out how much, if any of my wife's salary last year is taxable while she was on worker's compensation. She is a doctor and was paid beyond the state worker's comp limits … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,435 satisfied customers
Have question about filing extensions for corporations
Have question about filing extensions for corporations operating as an S-Corp. Please review previous question to you before proceeding with the question: https://my-secure.justanswer.com/question/ind… read more
taxmanrog
taxmanrog
Master\u0027s Degree
1,055 satisfied customers
My W2 also says no federal income tax was charged. I have no
My W2 also says no federal income tax was charged. I have no idea what I'm going to have to pay if I made 7,743 dollars there but paid no federal tax when I was supposed to.… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
I would like to ask this question anonymously please. My dad
Hello: I would like to ask this question anonymously please. My dad runs a small business and I am one of his employees. I have been working for him going on 4 years, since I graduated from college. I… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
I'm paying an actor $1250 for a project. Do I need to
I'm paying an actor $1250 for a project. Do I need to withhold taxes for this amount? SAG union doesn't allow 1099 for their members so I am responsible for correct withholding.… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
848 satisfied customers
I voluntarily amended a federal return and have not amended
I voluntarily amended a federal return and have not amended my state return yet. The federal amendment was accepted last November. Can I get in any trouble for submitting a state amendment more than s… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
i bought and sold some stock this year and had some gains in
i bought and sold some stock this year and had some gains in the amount of close to $2,000. i also will have about $1500 profit form my LLC company that i have on the side. i am also working full time… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
Hi. I have not filed my state or federal taxes yet. Lost
Hi. I have not filed my state or federal taxes yet. Lost my paperwork, have been ill, and just received new paperwork from federal and am awaiting paperwork from Arizona. (W-2) I'll obviously be going… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
What are the steps, both federally and state-wise, do I have
What are the steps, both federally and state-wise, do I have to take to hire my first employee? I have an LLC and a FEIN. I am in Virginia and have an SCC ID but am not sure how/if I need to check if … read more
InfoTaxes
InfoTaxes
Owner
Bachelor's Degree
256 satisfied customers
After the resignation of the tax person in a VERY small company,
After the resignation of the tax person in a VERY small company, can the company require an employee to provide his own 1099 for the next tax cycle? Pay stubs are available. I don't think I have ebver… read more
Phillip Bell, EA
Phillip Bell, EA
Tax Advisor
Bachelor's Degree
191 satisfied customers
need help ASAP 1. i have a small business and we have a
need help ASAP 1. i have a small business and we have a company do my payroll starting from September of 2010 they told me that they already did the NYS-1 and the NYS-45 but that they are only respons… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
my husband worked in FL most of last year, but we live in AL,
my husband worked in FL most of last year, but we live in AL, would he be considered a resident of FL or a non-resident....I know fl does not have state tax, but most of hs earnings are reported on hi… read more
Gerri A Harrison CFP EA
Gerri A Harrison CFP EA
Financial advisor/Tax preparer
Bachelor's Degree
86 satisfied customers
How do I pay payroll taxes and unemployment insurnace retroactively
How do I pay payroll taxes and unemployment insurnace retroactively? How do I calculate what I owe? I had a high school kid working for me on occasion all year. I had planned on paying him as a contra… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
I am an independent contractor. Company withheld only state
I am an independent contractor. Company withheld only state tax from each paycheck. W-2 was issued at the end of the year showing no federal tax, social security and medicare withheld. When asked comp… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Please help...I am witholding too much and want to stop that.
Please help...I am witholding too much and want to stop that. I need a second opinion as I have figured this myself but would like someone else to look at it. I am going to leave my husbands check as … read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
My previous employer (doctor) has not issued me my w2 as of ...
My previous employer (doctor) has not issued me my w2 as of yet. When I was fired (which was completely insane considering the circumstances), they made a last minute comment saying money was missing.… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
I will be making 20K a year next year paid once per ...
I will be making 20K a year next year paid once per month ($1600). I am single and will claim only one dependent (myself) on my W-4. How much will be taken out of each paycheck in total (FICA, fed and… read more
Christopher Phelps
Christopher Phelps
Sole Practitioner
Master Degree
1,180 satisfied customers
II e am the employer and received a letter stating i need to
I am the employer and received a letter stating i need to mail one of my employee's wages to the irs. I have unfortunately misplaced the letter and need to take care of this before myself OR worse the… read more
WebTaxMan
WebTaxMan
Tax Accountant
Bachelor's Degree
576 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x