A payroll company, MyPayrollHR, based in upstate New York, has vanished with nearly $35 million in payroll funds from its customers, leaving thousands of employees missing their pay but also not forwarding payroll taxes to the government for the employers.
This reminds me of a client that had a similar situation in CA. This company has over 200 employees and their payroll processor skipped town and did not pay $700,000 plus in payroll taxes to the Federal government.
When the IRS came calling the employer had to pay the money to the IRS even though the money was deducted from their bank account by the payroll company. Suffice it to say that IRS did not care as it was not their problem. The company made arrangements to pay the money back at $20,000 a month for 3 years.
Another client of ours had a similar situation last year and is now paying $10,000 a month until they pay the full amount of $200,000 plus interest and penalties.
Here is what a payroll processor does for you:
- Calculate payroll.
- Generate paychecks and ACH deposits for your employees.
- Calculate and make tax deposits.
- File quarterly and annual employment tax returns.
- Provide you with copies of employment tax returns.
- Provides you with a detailed record of each payroll
- Provides you with a summary employment taxes due and paid.
- Keep employee payroll records up to date.
- Implement employment tax law changes.
The lesson to be learned is to research your payroll vendors and check to make sure they are paying your payroll taxes.