The IRS can be very aggressive about collecting 940 and 941 payroll taxes.  Most of these cases are sent to a local IRS revenue officer rather than being handled by the IRS’s center for automated collection.  You need the help of a tax profession if a local revenue officer is calling you.

940 and 941 payroll taxes present difficult issues to businesses.  Typically, creditors, employees, and suppliers are all clamoring to be paid.  The IRS is the sole creditor that seems compliant.  It does nothing—at first.

But bear in mind that of all creditors IRS has the strongest power to collect what is owed to it.  Further, and not insignificant to a struggling business, 940 and 941 payroll taxes are never dischargeable in bankruptcy, while most other debts are dischargeable in bankruptcy.  Worse yet, even if your business is incorporated, you may have personal liability for unpaid 940 and 941 payroll taxes.  This personal liability likewise is never dischargeable in bankruptcy. 

In short, 940 and 941 payroll taxes need to be taken very seriously.  The IRS certainly takes 940 and 941 payroll taxes very seriously.  Call us for help.