Rutherford, New Jersey (PressExposure) August 29, 2011 -- When the IRS recently announced their plan to conduct more audits surrounding employment tax laws, New Jersey tax attorneys at The Thorn Law Group stepped up for business owners by saying "we can help businesses in need of legal advice." The IRS lawyers in New Jersey have one mission: to successfully represent their clients in sensitive tax controversies. The IRS is currently increasing the number and depth of audits and examinations it conducts by businesses subject to federal employment tax laws. The most common business employment tax dispute issues surround work classification, fringe benefits, officer and executive compensation and reimbursed expenses. The IRS is also reviewing businesses about issues such as payroll taxes, trust fund recovery penalties (TFRP), withholding, record-keeping requirements and tip compliance.
Work classification is one of the more difficult business employment controversies. A worker may be considered an employee or a contract worker. Although there are many similarities between the two in some companies, the tax implications are very different. Due to the increasing amount of misclassification of workers, the IRS is working more closely with state agencies to uncover businesses that may be misclassifying workers.
The penalties for unpaid employment taxes include IRS liens or levies against the businesses' assets, criminal charges against owners or a fine. The fines may reach up to $250,000, and the criminal charges may include incarceration. If convicted of willfully not paying employment taxes, the average jail time is 29 months. The penalty for not paying employment taxes is a percentage of the unpaid balance, which is equal to the income tax withhold from the employee plus the employers portion.
To help avoid tax issues and the consequences avoided with the tax problems it is wise to pay all taxes when they are due. All tax returns must be filed by the due date to avoid penalties, fees, and interest. It is also important to take the 10-point test to determine if workers are considered employees or independent contractors to avoid back employment taxes. If you receive a letter from the IRS it is important to contact your tax professional as soon as possible to respond to the IRS in a timely manner. It is also advised to keep all tax records and returns available and organized.
The New Jersey tax lawyers at the Thom Law Group have experience in civil and criminal tax law, tax controversy and litigation, IRS collection actions, employment and business tax law complex civil litigation, financial law, international tax law and professional ethics. The company is based out of New Jersey, but represents clients throughout the United States and internationally. Their primary client base is out of New Jersey, New York and Pennsylvania.
Thorn Law Group