Financial troubles can now be an excuse for late payroll tax deposits, according to the Tax Court says. I am curious how this case would play in Illinois since this is a Florida case.
Since the double impact of a recession and a significant decline in the region’s home prices caused cash flow problems for a staircase builder. Despite laying off employees and cutting benefits, the firm fell behind on its payroll tax deposits for four years. But each quarter, the business generally managed to scrape together enough cash to pay the prior quarter’s tax bill, plus penalties. Sometimes, it deposited enough to partly offset the current quarter’s liability. Under these circumstances, the Court abated the firm’s late deposit penalties.
(Custom Stairs & Trim, TC Memo. 2011-155)