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Withholding Tax not paid

hi all!!i have an interesting situation and was wondering if anyone has any ideas how i should go about it.upon doing account reconciliations on inactive clients the following came up- there was a client with PA SIT that was never paid.it seems the reason for this is bec the tax wasn't setup correctly in the company and it wasn't linked to the tax ledger.when reviewing the taxes due report this tax never showed up!!at this time the company has closed up shop and they were never even registered with PA. should i now have them register so we can pay the withholding taxes from 2 years ago!!

Comments

  • You need to talk to a tax attorney in PA. This is probably NOT a DIY project. You need them to review your customer services agreement contract to see who had responsibility for the original tax setup. You need to talk to your E&O insurance to see if this is covered if it ends up being a mistake on a client account by your company. You need their advice on how to correct it.

    And in the end, as I suspect you know, you need an audit on all clients and taxes they should be paying and making sure that in setup they are correct and that they have the registrations needed in each state they do business in so that payroll taxes can be done and submitted correctly.

    Other things that might come up are things like whether they paid WC insurance or into Unemployment during that time period if they weren't registered in PA.SIT might not be the only issue. (And aren't their some localities in PA that also have some specific taxes). This may be a much larger can of worms....seek legal counsel

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