By When you own and operate a business, you must exercise vigilant oversight, including watching over your payroll taxes. Here’s an example of why.
Rodney Taylor entrusted his corporation’s accounting and bookkeeping to Robert Gard, CPA. Over several years, Mr. Gard embezzled between $1 million and $2 million, including payroll taxes.
Despite Mr. Gard’s wrongdoing, the ultimate responsibility to settle the payroll taxes with the IRS fell on Mr. Taylor as the business owner and “a responsible party” under tax law.
The Taylor case highlights a crucial lesson: while delegation of duties is a part of business, you cannot transfer your responsibility for compliance with the tax laws. Here are two proactive steps to protect your business:
- Direct oversight. Ensure payroll reports are delivered directly to you, allowing you, a responsible party, the first review.
- Regular verification. Periodically check the IRS electronic federal tax payment system (EFTPS) to confirm that the IRS received payment for the payroll taxes.
By implementing these two simple measures, you significantly mitigate the risk of embezzlement and maintain compliance with tax obligations while safeguarding your financial interests and those of your company.
If you need my assistance setting up safeguards, please don’t hesitate to call me on my direct line at 408-778-9651.