Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

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: 1 year 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 1 year ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,028
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
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,028
4,028 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

1,300 satisfied customers

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

Richard

Richard

Tax Attorney

4,338 satisfied customers

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

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

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

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 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.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I have a federal tax lien filed 2015 with 2 assessment dates
I have a federal tax lien filed 2015 with 2 assessment dates in 2008 and 2009. you told me the both expire 2018 and 2019 respectively. how do I obtain an early release from the lien? I would like to p… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have a federal tax lien filed in 2015. The date of
I have a federal tax lien filed in 2015. The date of assessment is 2008 and other is 2009. I have read that each will be zeroed after 10 years and lien satisfied. Will IRS satisfy both in 2018 or wait… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
64 satisfied customers
The 2013 tax return was filed in year 2015 and later
The 2013 tax return was filed in year 2015 and later realized that the amount of taxes paid were more than the actual taxes due. therefore we are planning to amend the return. Will IRS send us refund … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Will my filing of federal taxes by the April deadline be
Will my filing of federal taxes by the April deadline be according to the current set of laws (e.g. unlimited deduction of state and local taxes) or will the new "reformed" tax bill and its new rules … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
I filed an extension on my tax return because I didn't know
I filed an extension on my tax return because I didn't know my tax credit. when do I need to have tis complete. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
W, is there a amend tax return there at IRS there for me? My
Hi, my name is ***** ***** Miller, is there a amend tax return there at IRS there for me? … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
64 satisfied customers
If someone has obtained my tax return and w-2 without my
Good morning. If someone has obtained my tax return and w-2 without my permission as well as showing it to other people, is that legal? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
For a ny state partnership tax return, if you file an
For a ny state partnership tax return, if you file an extension but don't pay anything and then end up owing a lot. Do they still recognize the extension or do they charge a failure to pay penalty (fo… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
How can I get an extension to file federal and state taxes
How can I get an extension to file federal and state taxes for 2016 … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
I'm trying to finish my tax return that was on extension but
I'm trying to finish my tax return that was on extension but I can't get into my return. … read more
Shan-Nel Simmons
Shan-Nel Simmons
Tax Professional/Owner
Master\u0027s Degree
29 satisfied customers
I filed an extension for 2013 tax return but no actual tax
i filed an extension for 2013 tax return but no actual tax return. Do I have until Oct. 15, 2017 to file for refund?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
I filed for federal tax extension and was approved, file
I filed for federal tax extension and was approved, file under married separate, after divorce finalized, in divorce decreed I am to file singe from 2016 forward, so do I have to complete the extensio… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,083 satisfied customers
Federal Tax Credit or NC Tax Credit For 2017, is there any
Federal Tax Credit or NC Tax CreditFor 2017, is there any type of tax credit for replacing a roof on a historical house (1870)? It is primary residence. They will either replace the roof or do "hydros… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,804 satisfied customers
I recently filed amended federal tax returns (1040x) for
I recently filed amended federal tax returns (1040x) for 2013 and 2014. I have received a refund for 2014 and am answering some additional questions for 2013. Do I need to file amended tax returns for… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I elected an extension to file my federal taxes for 2016,
I elected an extension to file my federal taxes for 2016, and am now preparing the return. During 2016 I received benefits from NY Unemployment, however, I never received a 1099 from the state for the… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,083 satisfied customers
I extended, I filed an extension on my 2016 tax return. Can
I filed an extension on my 2016 tax return. Can I contribute to my traditional IRA for 2016 up to extended filing deadline? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
What is the deadline for the last federal tax return for a
What is the deadline for the last federal tax return for a closed business? Is it within 2 months after the company is closed? Thanks.… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 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