Payroll Tax Compliance: Avoiding Penalties and Interest Charges

Payroll tax compliance represents one of the most financially consequential and closely monitored employment obligations facing U.S. employers. The Internal Revenue Service (IRS), Social Security Administration (SSA), and state revenue agencies maintain aggressive enforcement postures toward payroll tax violations, reflecting the critical role payroll taxes play in funding Social Security, Medicare, unemployment insurance, and federal/state revenue streams. Unlike most tax obligations where penalties accrue to organizational accounts, certain payroll tax failures trigger personal liability for business owners and responsible individuals—the Trust Fund Recovery Penalty can assess 100% of unpaid trust fund taxes against individuals personally, piercing corporate protections.