Bad Sign: Over 1 Million Employers Owe in Payroll Taxes

With it being tax season, I figured I’d check on how business is faring in keeping up on payroll tax submission.

Numbers are not looking very good. Here’s more from

A growing number of employers are failing to remit payroll taxes, with 1.4 million employers owing approximately $45.6 billion in unpaid employment taxes, interest and penalties as of December 2015, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, recommended the Internal Revenue Service improve its strategy for addressing egregious employment tax crimes. TIGTA noted that when employers fail to account for and deposit employment taxes, which they hold in trust on behalf of the federal government, they are in effect stealing. When employers fail to remit the payments, general tax revenues must be used to make up for the difference in the Social Security and Medicare trust funds.

The IRS’s Collection function uses the Trust Fund Recovery Penalty as a civil enforcement tool to discourage employers from continual noncompliance with the tax laws. In fiscal year 2015, the IRS assessed the penalty against approximately 27,000 employers, but that was 38 percent fewer than in fiscal year 2010, mainly because the IRS didn’t have as many revenue officers working at the agency. Meanwhile, the number of employers who have been delinquent on payroll taxes for 20 or more quarters has been growing, more than tripling over a 17-year period.


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