In many cases, companies deduct the taxes from the monthly salaries of their employees and these taxes are paid to the IRS at the end of the tax year. The company or organization that deducts these taxes is responsible for the proper filing and payments of these taxes every year to the IRS.
In order to pay the deducted taxes, employers must withhold the amount with themselves along with the social security taxes which are also to be deducted from the employee wages. At the end of the tax year, the amount is supposed to paid to the IRS with the proper filing of returns within the stipulated due date. If the amount is not paid on time, a penalty of 100 percent is charged. Also, even if partial payment is made, the penalty applies on the tax amount which remains unpaid. These penalties can be collected by the IRS without conducting any kind of judicial proceedings.
The people who are responsible or have the custody of funds that withhold with the company are liable to this penalty if the payments are not made to the government in time. Another major point here is the fact that the penalty is imposed not only on the officials or individuals involved, even the business organization has to pay the 100 percent penalty. This is known as the unpaid withholding tax penalty.
When you have been charged with unpaid tax withholding penalty and you fail to make the payments even further, the other penalties and interests may apply to you. As part of the income tax, the penalty on late payment of taxes or the interest on late filing can be imposed by the IRS in such cases if the non-payment of penalty prolongs for a longer period of time.