TAS Acts to Help After a Payroll Service Provider Embezzles From Over 400 Small Businesses

April 29, 2015

Every year, the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. All personal details are removed to protect the privacy of the taxpayer.

TAS helped a small business defrauded by an unscrupulous Payroll Service Provider (PSP). When a PSP embezzles funds from a business, the business is in effect, expected to pay twice. The taxpayer provides money to the PSP to calculate and deposit its employment taxes with the IRS. However, if the PSP embezzles the money instead of sending it to the IRS, the taxpayer is still liable for the debt to the IRS. In this case, TAS worked to obtain release of a levy the IRS placed on the business for its unpaid tax debt. After determining hundreds of businesses were affected by this one PSP, TAS also worked to help other businesses avoid lien filings or penalties, and helped taxpayers resolve their debts through offers in compromise. TAS turned the issue into a national project, successfully advocating for taxpayers throughout the country.

Learn more about Third Party Arrangements for Employment Taxes.

Each individual or business taxpayer is assigned to an advocate who listens to the problem and helps the taxpayer understand what needs to be done to fix it. TAS advocates will do everything they can to get the problems resolved and will stay with the taxpayers every step of the way. Occasionally we feature stories of taxpayers and advocates who worked together to resolve complex tax issues. Read more TAS success stories.