Senate Targets Payroll Tax Scam
Last fall, Roger Cyr, owner of the Lily Moon Cafe in Saco, Maine, was dumbfounded to learn that he owed $52,000 in back payroll taxes. A federal indictment now alleges that his payroll tax accountant pocketed tax payments for dozens of companies. Businesses in two other states were similarly duped. In response, the Senate passed legislation requiring that payroll agents be bonded and registered; that they be held responsible for penalties on unpaid taxes; and that businesses aren't automatically reassessed following an agent's mistake. The House of Representatives is now considering the measure. Meanwhile, the IRS has been sympathetic, Cyr says, waiving his penalties and negotiating repayment terms. "Hopefully we can recover," he adds.