IRS Tax Relief for Restaurant and Bar Owners Handled While You Run the Floor.
Updated
A slow month, a payroll deposit that slides, then another one. Payroll taxes are where a lot of restaurant trouble with the IRS starts, and the part withheld from your staff's checks can follow you personally. We take over the IRS side, from the first notice and the revenue officer to the program that resolves it.
Trust fund taxes
The income tax and employee Social Security and Medicare you withhold. Left unpaid, they can be assessed against you personally.
How it happens
Why Restaurants Fall Behind on Payroll Taxes
Restaurant money comes in fast and goes out just as fast. Food costs, rent, the linen service and the beer distributor all want to be paid this week. Payroll taxes, the ones you report on Form 941, run on a monthly or semiweekly deposit schedule, and in a slow month they're the easiest bill to push back. It feels like borrowing from the IRS for a few weeks.
The trouble is whose money that is. The income tax and the Social Security and Medicare you withhold from your staff's pay belong to them, and the IRS says you hold that money in trust until you deposit it (IRS, trust fund recovery penalty). If you use it to pay vendors instead, the IRS treats that as a sign of willfulness.
Then the penalties stack up. A late deposit costs 2% in the first five days and 10% after fifteen, and 15% once it's still unpaid more than ten days after the first IRS notice (IRS, failure to deposit penalty). A quarter or two behind becomes a balance that's very hard to catch up on while you're still open.
IRS problems
The IRS Problems Restaurant Owners Bring Us
Most of them start with payroll. Some start with a return that never got filed during a rough year. All of them get worse while the IRS envelopes sit unopened in the office.
Unpaid 941 Payroll Taxes
Missed deposits, late 941s, and penalties piled on top. We pull the business transcripts, find out exactly which quarters are open, and work the balance into a plan or program the restaurant can actually carry.
See how we helpTrust Fund Recovery Penalty
Letter 1153 means the IRS plans to assess the unpaid trust fund taxes against you personally, and you have 60 days to appeal. We look at who really decided which bills got paid and file the protest when the facts support it.
See how we helpA Revenue Officer on Your Case
When a revenue officer takes the case, Letter 725-B sets a meeting, sometimes at the restaurant itself. With Power of Attorney on file, we take that meeting, answer the officer's requests, and keep the back-and-forth away from your staff.
See how we helpLevies on Card Sales and Bank Accounts
The IRS can levy your merchant account, the processor that settles your card sales, and the bank account payroll runs through. A bank holds levied funds 21 days before sending them, and that window is when we push for a release.
See how we helpFederal Tax Liens on the Business
A Notice of Federal Tax Lien is a public filing that tells creditors the IRS has a legal claim to your property, so anyone you borrow from can see it. We work the balance behind it and the discharge, subordination, or withdrawal options that may fit.
See how we helpTip Reporting and Payroll Audits
When staff underreport cash tips, the IRS can send the restaurant a notice and demand for the employer share of Social Security and Medicare on those tips. We represent you through the IRS exam and fold the result into the rest of your case.
See how we help
Your personal liability
The Trust Fund Recovery Penalty: When Payroll Taxes Become Personal
Your LLC or corporation doesn't protect you from this one. Under Section 6672 of the Internal Revenue Code, the IRS can assess the unpaid trust fund taxes against any responsible person who willfully failed to pay them over. That can be an owner, an officer, a partner, or anyone else with the authority to decide which bills get paid.
Willful doesn't mean you meant any harm. The IRS says no evil intent is required, and paying other creditors while payroll taxes went unpaid counts as a sign of willfulness. The IRS may interview you on Form 4180, then send Letter 1153 proposing the penalty (IRM 5.7.6). Once it's assessed, liens and levies can reach your personal assets.
100%
The penalty equals the unpaid trust fund tax: withheld income tax plus the employees' share of Social Security and Medicare.
60 days
From the date of Letter 1153 to appeal the proposed penalty, or 75 days if the letter is addressed to you outside the United States.
Open or closed
The business doesn't have to shut down first. The IRS can assess the penalty while the restaurant is still serving.
Sources: IRS, trust fund recovery penalty · IRC § 6672 · IRM 5.7.6
Your card sales
When the IRS Levies Your Card Processor or Bank
A lot of a restaurant's money arrives through a card processor that settles the day's sales into your bank. The IRS knows that. Its collection manual walks revenue officers through levying a merchant account, and the example it uses is a restaurant owner (IRM 5.11.6.16).
The levy goes to the processor on Form 668-A, the same form the IRS uses for bank accounts and business receivables (IRS, third-party levies). Money the processor owes you for sales you've already made goes to the IRS instead. If the bank is levied too, the funds are held 21 days and then sent (IRS, levies).
What we do: file Power of Attorney so the revenue officer works with us, pull the payroll and income transcripts, get any missing 941s filed, and request a release tied to a payment plan or another program. Whether to release is the IRS's decision. We make the case for it while you keep the kitchen running.
How a payroll tax problem moves
-
A 941 Deposit Gets Missed
Late-deposit penalties start at 2% and climb from there.
-
A Revenue Officer Is Assigned
Letter 725-B sets a meeting at an IRS office, your business, or by phone.
-
The Processor or Bank Is Levied
Form 668-A goes out, and card settlements stop reaching you.
-
Letter 1153 Reaches the Owner
The IRS proposes the trust fund penalty against you personally.
-
We Step In
Power of Attorney, transcripts, missing returns, and a release request. The IRS decides.
Discreet help
You Don't Have to Explain How It Happened
Plenty of the owners we talk to are carrying this alone. They haven't told their partners or their managers, and sometimes not their spouse. They still open on time, make payroll on Friday, and greet the regulars while the IRS letters pile up in the office. It happens to good operators all the time, and we don't judge how it got here.
Your consultation is free and confidential. Once you hire us and Power of Attorney is on file, the IRS deals with us, so the calls and the back-and-forth stop landing on you.
How We Keep It Discreet
- A free, confidential first conversation
- No judgment about how it happened
- Once Power of Attorney is filed, the IRS contacts us
- Phone, secure document portal, and video, with no office visit
How it works
How We Work a Restaurant's IRS Case
You don't have to close for a day or step away from the line. We work by phone, secure document portal, and video, and once Power of Attorney is filed, the IRS contacts us instead of the restaurant.
-
Free Consultation
A representative calls you back, listens to what is going on, and tells you whether we can help.
-
Power of Attorney
We file Form 2848 so the IRS contacts us instead of you.
-
Transcripts and Returns
We pull your IRS transcripts and get any missing returns filed.
-
Request to the IRS
We submit the program request on your behalf. The IRS reviews and decides.
Timelines and outcomes are determined by the IRS based on the facts of each case. Results vary and are not guaranteed.
IRS programs
IRS Programs That Fit Restaurant Owners
Installment Agreement
Spreads the balance into monthly payments. The IRS generally doesn't levy while a plan is being considered or in effect, as long as new deposits and returns stay current.
Penalty Abatement
Late-deposit penalties on 941s can come off for reasonable cause, or under first-time abatement when your compliance history qualifies. That shrinks the balance before a plan starts.
Offer in Compromise
Settles for less than the full balance when the income, expenses, and equity behind the business show it can't be paid. We run the IRS formulas before anything gets filed.
Levy Release
When a levy hits the processor or the bank, we request a release tied to a payment plan or another program. Releasing it is the IRS's call, and we give it the reasons.
Where we help
Where We Help Restaurant and Bar Owners
IRS representation is federal, so we can work your case wherever the restaurant is. These city pages cover what we see in some of the dining markets where we help owners.
Frequently asked
Restaurant Owners and the IRS: Common Questions
Can the IRS Hold Me Personally Liable for My Restaurant's Payroll Taxes?
What Is IRS Letter 1153?
Can the IRS Levy My Credit Card Sales?
A Revenue Officer Wants to Meet at My Restaurant. What Should I Do?
If I Close the Restaurant, Does the Payroll Tax Debt Go Away?
Am I Responsible for Taxes on My Servers' Tips?
How Much Does IRS Tax Relief Cost?
Verified review · Google
I was able to save so much money using this company. They’re very professional and were able to get me through these tough times. Also, any questions I had asked, they had no hesitation to answer them. A lot of other companies beat around the bush. Not these guys! Solid service.
ITR is the serious deal. They were able to transform a huge tax debt into something a fraction of the owed amount. Not sure how they did it but these guys are good! Affordable too….not to mention great customer service
They were very helpful and friendly when walking me through the process. Their knowledge of how everything works was second to none.
Ready to Hand Off the IRS and Get Back to Running Your Restaurant?
Free consultation with our team. No obligation.
- Free, confidential consultation
- A representative reaches out within minutes
- No obligation