What Will IRS Employment Tax Audits Cover?
There are three federal taxes collected, paid and/or remitted by employers. Income taxes are generally deducted from an employee’s wages and remitted to the IRS by employers throughout the year. Likewise FICA (Social Security and Medicare) is deducted from employee’s wages and also matched by the employer. FUTA or federal unemployment taxes is paid solely by the employer. FUTA is presently capped at the first $7000 of an employee’s annual wages. An employer has the obligation to both withhold and promptly remit taxes collected from employees. Failure to do so can result in the employer having liability for such taxes as well as interest and penalties thereon. Also, with respect to income and FICA taxes, if the employer fails to meet its obligations, individuals who are responsible for collecting (withholding), accounting for and remitting (depositing) income and FICA taxes can be personally responsible for such taxes as “responsible persons.”2 The focus of employment tax NRP will be in
