Employers: Beware the Trust Fund Recovery Penalty. Companies that withhold taxes from paychecks but fail to pay the tax over to the IRS could face this penalty, which equals 100% of the unpaid tax. It can be assessed personally against any responsible party. A U.S. District Court deemed one construction company president to be liable for the penalty, despite a security agreement with a lender that required the lender’s approval to make payments. He knew of the unpaid tax, the court noted, but didn’t seek permission to pay it.
The IRS warns about two tax credits where it sees a lot of scams: the research credit and fuel tax credit. It says it continues to see significant misuse of the research credit, and that improper claims “generally involve a failure to participate in or substantiate qualified research activities.” Also, some businesses include expenses for nonqualifying activities in their claims. “Frivolous claims” involving the fuel tax credit can result in a $5,000 penalty. The credits are part of the IRS annual “Dirty Dozen” tax scams. Read more here: http://bit.ly/2IyfarH