Business balance
Unpaid Form 941 or other employment-tax liabilities remain due from the employer, with penalties and interest.
Unpaid payroll taxes
The IRS may pursue more than the business.
Payroll taxes withheld from employees are treated differently from an ordinary tax bill. The business can face rapid collection, while owners, officers and other responsible people may be investigated for personal liability. Kōkua Tax helps Hawaiʻi employers regain control before the problem spreads.
Local Enrolled Agents · Business and personal exposure review · Direct representation
Still running payroll?
Current deposits must stay current. A payment plan for old quarters does not excuse new missed deposits.
IRS deposit rules →Why payroll debt is different
Part of this money came from your employees’ paychecks.
Federal income tax and the employee share of Social Security and Medicare are “trust fund” taxes. The employer holds them for the United States. Using those funds to cover rent, vendors or other operating costs can expose responsible individuals to a separate assessment.
Deposit penalties
Failure-to-deposit penalties can increase with lateness and may reach 15% after notice and demand.
Personal assessment
The IRS may assess the unpaid trust-fund portion against each person it determines was responsible and willful.
Trust Fund Recovery Penalty
Personal liability can equal 100% of the unpaid trust-fund tax.
The Trust Fund Recovery Penalty generally includes withheld federal income tax plus the employee share of Social Security and Medicare. It can be asserted against more than one responsible person, although the IRS policy is to collect the tax only once.
IRS: Employment taxes and the TFRP →Who might the IRS investigate?
- Owners and corporate officers
- Partners and managers
- People authorized to sign checks
- People who controlled online banking or payroll
- Anyone who decided which creditors were paid
Title alone does not decide the caseThe IRS looks at actual authority, knowledge and financial control.
Form 4180 interview
The IRS is building a responsibility case.
A Revenue Officer may interview potentially responsible people and document the answers on Form 4180. The investigation focuses on authority over business finances and whether other bills were paid after the person knew payroll taxes were unpaid.
When a Revenue Officer is assigned
Your case has moved into direct field collection.
A Revenue Officer is an individual IRS civil collection employee—not an IRS Criminal Investigation special agent. The officer may demand missing returns, financial information, current payroll deposits and a workable resolution by specific deadlines.
IRS: how to verify an IRS field employee →A Revenue Officer carries a pocket commission and a federal HSPD-12 photo identification card. These are credentials, not a police-style badge.
IRS rules expressly prohibit Revenue Officers from carrying firearms or other weapons. IRS Criminal Investigation special agents are the armed law-enforcement personnel.
The IRS generally sends Letter 725-B or calls to arrange a home, office or other meeting. An unannounced visit is now reserved for rare actions such as serving a summons or subpoena, a seizure, or a similarly sensitive enforcement step.
Signals that require action
Know when the case has escalated.
CP518 / Form 941 delinquency
The IRS is seeking a return. Continued nonfiling can lead to an estimated assessment and enforced collection.
CP207 or CP294
The IRS says deposits were late, short or made incorrectly. The calculation and deposit application should be reviewed.
Direct business collection
The case has moved beyond ordinary notices. Financial information, deadlines and current deposits become immediate priorities.
Letter 1153
The IRS proposes a Trust Fund Recovery Penalty. The recipient generally has 60 days from the letter date to appeal.
How Kōkua takes control
Stop the new problem. Rebuild the old one. Protect the people involved.
- 01Verify the accountPull transcripts and identify every missing return, deposit, penalty and active deadline.
- 02Establish current complianceFix current payroll deposits and returns so the business stops adding new debt.
- 03Reconstruct the quartersReconcile payroll reports, Forms 941, tax deposits and IRS account applications.
- 04Address personal exposurePrepare for the responsibility investigation and respond to proposed assessments.
- 05Build the resolutionEvaluate full payment, installment arrangements and other collection alternatives supported by cash flow.
The Kōkua difference
Your business needs a plan it can actually survive.
A mainland salesperson may promise a settlement before reviewing the quarters, current deposits or personal exposure. Kōkua works from the account records and the operating reality of a Hawaiʻi business.
You work with Hawaiʻi-based Enrolled Agents—not a sales floor and a rotating case department.
We address missing returns, collection risk, penalty issues and the personal investigation together.
We do not sell an Offer in Compromise when the payroll facts support a different solution.
The proposed resolution must account for ongoing payroll, current taxes and the ability to keep operating.
Official IRS sources
Read the rules behind the guidance.
IRS: Employment taxes and Trust Fund Recovery PenaltyIRS Publication 15: Employer’s Tax GuideIRS Topic 757: Payroll deposit requirementsIRS: Enforced collection actionsIRS: Revenue Officer contact and identificationIRS Manual: Revenue Officer weapons restrictionIRS Manual: Failure-to-deposit penalties
Do not wait for another missed deposit
Let’s find out how far the payroll problem has gone.
Give Kōkua Tax 15 minutes to understand the quarters, notices and people involved. We will explain the immediate risks and the first step toward protecting the business.
Schedule my free 15-minute call(808) 565-8244Free · Confidential · Local Enrolled Agents
General educational information only; not legal or tax advice. Responsibility, willfulness, penalty relief and collection options depend on the specific facts and IRS account record.