Many businesses that find our company are in a quandary: they didn't file their 941 tax forms because they were afraid they might owe. Most of these companies submitted W2's for their employees to the Social Security Administration, but they didn't file 941's with the IRS. As you might expect, the IRS eventually comes after these businesses by...
1. Filing SFRS (Substitute for Returns) using the W2's as their basis for the 941's.
2. Doing an IRS audit, where the auditor essentially asks you to file the 941's through them.
What do late 941's mean to you and what is the significance of the SFRS?
As we alluded to in an earlier post, the IRS has three years to assess the trust fund against you personally for a Corporation, Partnership or multiple member LLC. However, if the balances are created as SFR's there's no statute to collect. The IRS can collect the SFRS without a 3 year rule.