The IRS does not offer a small business discount. Payroll tax problems, unfiled returns, and worker classification disputes can all turn into personal liability for owners.
Payroll taxes
Withheld employment taxes are held for the government. When they are not paid over, the IRS can pursue responsible people personally through the Trust Fund Recovery Penalty. In serious cases, willful failure to pay over is a felony under IRC 7202. See the section 7202 guide.
Keeping the business alive
The goal is resolution, not liquidation. Closing a business does not pay a tax debt. A plan that keeps it running often does.
General information only, not legal advice. Reading this page does not create an attorney-client relationship. Laws and IRS procedures change; the sources cited were reviewed on the date shown above.