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Employment Tax Disputes

Maryland Business Tax Lawyer Resolving Employment Tax Disputes

Thorn Law Group provides strategic solutions for businesses dealing with high stakes employment tax disputes. Our lawyers work with small and mid-sized companies throughout Maryland and across the United States to identify the best methods available to successfully resolve tax law matters before the Internal Revenue Service, the U.S. Department of Justice, federal and state courts and state taxing authorities.  We are a trusted team of tax law professionals committed to protecting our clients’ businesses and reputations at every stage of the legal process.

IRS – Questionable Employment Tax Practices

The IRS has launched a nationwide initiative aimed at uncovering employment tax schemes and illegal practices designed to avoid federal and state employment taxes.  This ongoing program, known as the Questionable Employment Tax Practices (QETP) initiative, is a collaborative effort on the part of the IRS, National Association of State Workforce Agencies, U.S. Department of Labor, Federation of Tax Administrators and a number of state workforce agencies to help increase compliance with employment tax rules and regulations at both the federal and state levels.  The QETP initiative allows the IRS and participating state workforce agencies to share information such as employment tax reports, audit reports and audit plans in an effort to locate employers who may be taking inappropriate actions to avoid their federal and state employment tax obligations. 

The IRS has identified a number of questionable employment tax practices.  These unlawful activities and schemes include:

  1. Pyramiding of employment taxes (business withholds taxes from employees but intentionally fails to remit the taxes to the IRS)
  2. Unreliable third party payers (payroll service providers and professional employment organizations)
  3. Frivolous arguments for not paying employment taxes
  4. Offshore employee leasing
  5. Misclassifying worker status (employee vs. independent contractor)
  6. Paying employees in cash
  7. Filing false payroll tax returns or failing to file payroll tax returns
  8. S corporation officers compensation treated as corporate distributions

When the IRS suspects a business is non-compliant with the employment tax laws, the agency can launch a civil audit of the company and file tax liens or levies against property and assets owned by the business.  The IRS Criminal Investigation (CI) Division can also investigate and refer for prosecution businesses that have willfully attempted to evade their employment tax obligations.  If an IRS criminal investigation results in prosecution, the business can face serious fines and penalties, including incarceration of the individuals responsible for the violations.

Dedicated to Protecting Your Business

If you are involved in an employment tax dispute with the federal or state government you should discuss your situation with a dedicated tax law team.  The attorneys at Thorn Law Group have decades of collective experience working with businesses to ensure their employment tax practices are in full compliance with federal and state laws and regulations.   When a company is dealing with complex tax issues or has been contacted by the IRS for an employment tax audit, we are fully prepared to manage the process from start to finish.   Contact our Maryland satellite offices today at (240) 235-5096 or ket@thornlawgroup.com to discuss how we can help you resolve your tax law problems.

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