Last Updated: 05.06.2020
Control your own payroll and your own destiny
As a Baltimore small business lawyer I try to keep up on the news for businesses and what trends to keep an eye on for my clients. One story, in particular, will make any small business owners cringe. For those of you who may not know Accupay, a Harford County-based payroll company, has recently been accused of failing to pay its client’s payroll taxes. They filed bankruptcy and are being investigated by IRS agents. Accupay’s clients include small lawyers offices, doctors, veterinarians, restaurants, and other small businesses. In fact, your Baltimore Small Business lawyer has a few friends who were victims of Accupay’s failure to send money to the IRS.
What can a small business do to avoid this problem?
Payroll and paying payroll taxes is an extreme and necessary burden on all small businesses. If you don’t do it you can go to jail, get sued, or lose your ability to run your business. Payroll services offer employers a way to efficiently manage their payroll systems without spending valuable time away from their core business. A growing trend towards local, small companies to manage payroll has met this demand. However, as illustrated in this Wall Street Journal article, there are may pitfalls to using a small company.
Baltimore Small Business lawyer tips:
Here are a few quick tips to improve your payroll company experience and avoid fraud:
- Have a payroll services that automatically transmits your employee’s money to the IRS. Intuit provides such a service. Intuit doesn’t actually touch your money, they just arrange the transfers and calculate the amounts.
- Get receipts from your payroll provider showing that they did actually transmit the money to the IRS
- Double check that the money actually did go to the IRS. You should be able to independently verify that the IRS has received the correct payment amounts annually.
- Keep a reserve fund. To any small business, 10, 20, or $80,000 can send an employer spiraling into bankruptcy. Don’t let it happen to you.
Ultimately all small business owners are responsible for their taxes, so if your payroll company fails to pay your taxes, you still must pay, often with interest. The only thing you can do is to carefully vet and select your payroll company. If all else fails, contact your favorite Baltimore Small Business Lawyer for help.