You Know What Really Torques Me?

The Coffee Shop
1

Our businesses are struggling. Business is down and it is hard to get money collected from others that owe you as they are in the same boat. In other words, cash flow is not good. So we will be a few day late paying Arnold his payroll taxes and will get fined for this. So then I read about all of the ruling class ditching their tax bills and of course I get pissed. They get a pass and I get a fine and probably arrested if I do it. The ruling class takes care of their own.

Can a society like this continue to grow and prosper?

2

I agree with you but are you sure they didn’t pay fines along with the bills?

3

No it can’t. We are screwed but we have our political parties to make us feel all warm.

4

Yes, plus republicans won’t let us be gay or smoke pot but get to do it themselves.

you can’t win!

5

Hopefully it will. The problem goes back to: Who watches the watchdogs?
I am just glad Obama has gone about bringing change to DC by appointing such ethical persons to high positions. The only change I have seen thus far is the name of the corrupt or cheating politician.

6

I’m thinking of sending them an IOU since I’m going to be late anyway.

7

Not a chance! You aren’t a politician. The laws are different for them.

8

I’m thinking of sending them an IOU since I’m going to be late anyway.
I’d just wait to pay until you get nominated for a high political post…

9

I’ve been saying since I’ve been in business that the “Fines and Penalties” associated with payroll taxes are outrageous.

Regardless of reason for being late they are completely over burdensome and far beyond what any credit card comes close to charging.

For instance. If you had 10K on a credit card and missed a payment you would owe probably 20-50$ for a penalty. If you didn’t pay for another 30 days you would owe 166$, plus another 20-50$ penalty.

If you had 10K that you owed the IRS as tax payment you would owe 200$ for being one to five days late. Mind you if you pay payroll on Friday your payment is likely due the following Mon-Tues. If you are six to fifteen days late you owe 500$ and a whopping 1000$ if you are 16 days or more late.

On top of all the above they also add interest and “Additional penalties” of 5%, in this case another 500$, once they decide to send you a notice. So not including any interest due, one can accrue 1500$ of penalties in as little as 45 days or so on 10K owed.

To complicate matters even more they have the tendency to calculate the “Worst case” although if you hire an attorney, an accountant and an IRS expert you can fight that. What they have the tendency to do is if they deem you have “Missed” or underpaid a payment you don’t just accrue “Penalty and interest” on the “Late” payment, but you accrue penalty and interest on EVERY payment you make because they apply the new payment to the missed payment.

For instance. You owe payroll tax of 10K each week. For some reason you underpaid or just missed a payment.

Week one -You miss
Week Two - You pay in full (But they apply this to week one)
Week three - You pay in full (But they apply it to week two)
Week four - You pay in full (But they apply it to week three)

Your total penalty at the end of week four would look like this.

Week one - 6+ days late = 500$
Week two - 6+ days late = 500$
Week three - 6+ days late = 500$
Week Four - 6+ days late = 500$

So in one month, despite the fact you missed on one payment you now owe 2K in penalties.

If you are so unlucky as to not catch the mistake this will go on for about 8 weeks at which time you’ll get a nice notice in the mail that you owe 2K…but you really owe 4K by this time :slight_smile: So you’ll can in to get your nice surprise and they will treat you like criminal.

There are sights however that are actually devoted to “Weeding” this all out an finding the minimal amount you owe, which in this case would be 1500$ not 4K.

OF course had this been the credit card company “Taking advantage of you” at 20% interest. You would owe them only 180-230 bucks and that’s including the penalty for not paying.

~Matt

10

They get a pass and I get a fine and probably arrested if I do it.

The penalties and interest are calculated the same for everyone, if they get caught. If you earn more, and avoid more and do end up having to pay, you will actually pay more.

The tax system is an an honor system and not only the wealthy cheat. They just get the headlines because the amounts are higher.

Tax cheats come in from all income levels.

11

What is a “driver” anyway? Does that mean Daichle was riding around like a rock star in a limo? I don’t even know what having a “driver” means. Once I rented a limo for about a half hour to take my young family to see Phantom of the Opera In San Francisco just for giggles. That was out 20 minutes of rock star life I guess. The ruling class is so removed from the rest of us and they need to be taken down a few notches in a hurry.

12

I’ve never seen it analyzed that way, thanks.

13

I think Matt has your solution. Pay the taxes with a credit card. It will buy you some time.

If cash flow is still a problem 30 days out then the cost is not nearly as steep.

14

Yes I always got a good chuckle out of congress when they would pass laws to “Protect people” from those “Predatory” credit card companies that charge a 20-25% APR to people that refuse to pay their bill. I always wanted to see if I could call them up and ask them if they could protect me from the predatory IRS.

On top of that the absolute WORST experience I’ve ever had was when dealing with “Penalties” from the IRS.

We once had a “Penalty” and called and asked for a waiver. The guy short of called me a criminal and pretty much threatened me. We had been late on a payment and then I had the audacity to “Not open” the notice as soon as it came thru the door so we were nailed with even stiffer penalties.

He asked me, “Why didn’t you open the notice?”. I replied I don’t open anything that comes from the IRS, I hand it to my accountant once a month". He tells me I better open everything from the IRS as soon as I get it or risk going to jail. I pretty much said if I opened every piece of crap I get from the IRS I would end up spending half the day opening it and the rest of the day on the phone with my accountant trying to figure out what it meant.

In the end they finally “Lowered” the penalty but I was with in a couple sentences of renting a Ryder truck, stopping at the truck stop and Farm and Fleet and heading to Washington at that point.

~Matt

15

Oh by all means if the reason you are paying “Late” is due to cash flow problem, beg borrow or steal the money. You’ll be time and money ahead. DO NOT, I repeat DO NOT get behind on taxes. The penalties build so fast they can EASILY take a business that was struggling and throw them over the edge. On top of that taxes can not be gotten out of via bankruptcy, credit card bills can. Not that I agree morally with that, but something to keep in mind.

OTOH for those of us that actually forget on occasion, we’re screwed and it’s not like you have any “Window” to work with. In our case payroll is on Friday, the payment is due the following Tuesday. If you blink you’re late. I don’t even want to think about how much I’ve spent in “Penalties” over the years I’ve been in business.

~Matt

16

republicans won’t let us be gay or smoke pot but get to do it themselves.

lol…

17

What, there are laws that apply to them? I thought they were above all that petty nonsense.

18

"Can a society like this continue to grow and prosper? "

No.

19

yes it can, there are thousands of examples of corrupt, shit societies prospering and growing.

for example, refer to EVER society that ever prospered and grew.

20

I’ve been saying since I’ve been in business that the “Fines and Penalties” associated with payroll taxes are outrageous…
~Matt

Ok, I’ve run a small business for the past 20 years and have dealt with payroll, corporate, property, and sales taxes. I’ve survived a sales tax audit in CA. I’ve had VA put a lien on my business bank account because of a paperwork error on their end – no letter in the form of “dear Mr. MOP, our records show…”, just a notice of lien from my bank. I’ve paid what I consider more (much more) than my fair share of taxes over my working life and done so with meticulous honesty and compliance with the rules. Yet, my dealings with the tax authorities have been some of the most unpleasant and stressful experiences in my life. So, to put it bluntly, I’m no friend of the IRS.

But…

Payroll taxes are different than other taxes on a business – the money doesn’t belong to the employer. When an employer disperses his payroll, he’s just a temporary custodian of the employee’s taxes. The IRS has to take a hard line or too many business would be tempted to play fast and loose with their payroll taxes.