Topic Guide
What Is Tax compliance?
Tax compliance is a subject covered in depth across 1 podcast episode in our database. Below you'll find key concepts, expert insights, and the top episodes to listen to — all distilled from hours of conversation by leading experts.
Key Concepts in Tax compliance
Trust account (payroll taxes)
The IRS classifies withheld payroll taxes from employees as a "trust account," meaning employers are holding money in trust for the government. Dave Ramsey explains that not remitting these funds is taken "extremely serious" by the IRS, and these specific debts are non-bankruptible, effectively living "forever."
Irs 941 payroll taxes
These are the federal payroll taxes that employers are legally obligated to withhold from employee wages and submit to the IRS. The episode highlights that these specific taxes are "not bankruptible" and are treated with utmost severity by the IRS when unpaid, unlike other types of debt.
What Experts Say About Tax compliance
- 1.Payroll taxes (IRS 941s) are considered "trust accounts" by the IRS, are not bankruptible, and "live forever," making them an extremely serious and persistent liability.
- 2.Not filing income taxes is a criminal offense, a distinction from merely not paying them, with legal repercussions including potential jail time, as 2,561 people were jailed last year.
- 3.Coming forward voluntarily to the IRS for unfiled taxes is crucial to avoid criminal charges and severe penalties compared to being discovered by the IRS.
- 4.Bankruptcy does not discharge federal tax debts, particularly payroll taxes, meaning these obligations will remain post-bankruptcy.
- 5.The IRS puts non-payment of withheld employee taxes into an "extremely serious bucket" due to their "trust account" status.
- 6.A significant amount of credit card debt, totaling over $70,000, compounds the caller's severe financial spiral alongside his tax problems.