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Employers Who Do Not Withhold Payroll Taxes

May 16, 2005 | | Comments Comments Off

ear Liz: I wanted to pass on a suggestion for other readers who might be in the same situation I was: working for a small business that refused to make payroll tax contributions to the Internal Revenue Service, Social Security or the state.

A business’ failure to pay affects employees’ future Social Security benefits, as well as causes problems for them at income tax time.

I reported the fraud by filling out Form SS-8 for the IRS and by contacting our state unemployment office.

Crooked business owners who don’t pay payroll taxes on their employees are short-changing the whole of society.

A: Business owners who pocket their employees’ income tax, Social Security, Medicare and other withholdings are crooks indeed. But so too are the deluded few who insist that they’re not required to withhold anything from employee paychecks.

The arguments of these tax protesters have been thoroughly refuted in the courts, but until the IRS and state tax agencies catch up with them, their employees pay the price.

If you have any question about whether your employer is properly making payroll tax contributions, check the wage and benefit statement you should be getting annually from the Social Security Administration. If the amount for any year is lower than it should be or — worse yet — zero, contact the administration immediately.

You might also want to check your pay stubs carefully against your year-end W-2 forms. If your employer didn’t issue W-2s, contact the IRS.

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Categories : Q&A, Taxes