IRS penalties- avoid them at all costs.
Business owners who filed extensions have a short time left to file their corporate returns, due on September 15. The penalty for late filing of S-Corp returns is $195 per month per shareholder. Even though the S-Corp passes through any income taxes to the owner, it can be penalized hundreds of dollars for filing even one week late.
As a rule, it’s better to file any tax return that is due even if you don’t have the ability to pay. The failure to file penalties usually are more than the failure to pay penalties. If you can’t pay what you owe the IRS, work with a tax professional to learn all your options.
Believe it or not, a Texas doctor was hit with a $4.3 million penalty for unpaid payroll taxes after his CFO embezzled the money with which to pay them. And to make matters worse the doctor lost to the IRS in court!
Why can this happen? Because as the business owner, you are the responsible person under the law for making sure payroll taxes are remitted to the government. Even if you hire a payroll service, you are ultimately responsible. The doctor, in this case, had not made sure the CFO did his job properly and he paid the price, including the closing of his business.
As a business owner, you owe it to yourself and your employees to work with a competent tax professional so that you can avoid penalties and keep your business afloat.