No one likes dealing with tax fees and sometimes they seem to pop up at the worst times.
A late, short or incomplete tax payment can quickly snowball into a mountain of fees, interest charges, and penalties. A new effort called the Early Interaction Initiative hopes to help avoid needless accruement of these sorts of charges.
As the statement on the IRS website reads, “The initiative is designed to help employers stay in compliance and avoid needless interest and penalty charges. The initiative will seek to identify employers who appear to be falling behind on their tax payments even before an employment tax return is filed.”
Rather than waiting until it may be too late to contact businesses that seem to be having trouble keeping up with their payroll tax payments, this new program is designed to address issues much earlier on in the process. This means fewer costly fees for small businesses that may not be able to afford the steep fees and penalties that can quickly pile up.
Sometimes employers divert taxes taken out of their employees paychecks to use for working capital or other needs. Doing this can lead to steep charges and fees quickly piling up. Previously, the IRS waited much longer before getting involved, often resulting in small businesses racking up much more in fees and liabilities than they expected, or can pay.
In order to avoid this, the new initiative will monitor the payment habits of businesses and sending automated alerts when it seems they may be having problems. If things are getting too far out of hand, an IRS agent may even be sent to the employers at their place of business in order to provide advice and assistance.
Small Business Deals
The goal is to help provide employers with information on how to keep the situation under control and how best to solve it, without paying more in fees than needed. As IRS Commissioner John Koskinen stated, “Employers play a key role in our tax system, and we want to offer them the information and assistance they need to carry out their responsibilities. With early interaction, we will be able to offer help weeks or even months sooner, when it can often do the most good.”
IRS Photo via Shutterstock
