Prosecution for Failing to Collect Business Sales Tax

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Prosecution for Failing to Collect Business Sales Tax

When you conduct business within a state with sales tax, you have an obligation to that State, to take charge of collecting and remitting the taxes to the tax authorities. When you fail to do this, there might be harsh penalties, interests and even jail term that may apply.  Many States consider the failure to collect sales tax as a criminal offense. For some states such as New York, they might broadcast these issues by issuing press releases. The objective is to increase the level of awareness in taxpayers about the importance of keeping tax laws.

Many of these press releases may ruin the reputation of the business owner because it may contain the names, addresses and full details about the business of interest. Sometimes, a mug shot may be included.

Therefore, as an officer or owner of a business, you must accurately collect and pay business sales tax to the authorities.

However, if for any reason you have either failed to collect the tax or you collected the business sales tax and failed to remit it, you can avoid all of these penalties and unnecessary events.

How to avoid prosecution for failing to collect Business sales tax

Noncompliance with business sales tax laws does not have to lead to these kinds of events that may even close down your business or set it back financially. Here are the various ways you can manage the situation effectively.

1.    Get Professional Help

The first step towards righting your business once you have discovered these errors is by the immediate hiring of a reputable tax expert who will offer guidance with regards to next steps from then on. Ensure that your financial records are straightened out and the said funds adequately collated.

Begin preparing and arranging the funds need to pay towards all unremitted sales tax as revised from the business sales tax returns.

2.    Enroll for a Voluntary disclosure program

Some states have a dedicated voluntary disclosure program where taxpayers may pay back their taxes without fear of penalties or criminal prosecution. However, there is a small condition of eligibility.

To be eligible for this program, you must be prepared to come forward voluntarily. This means that the State has not already open audits or investigations or contacted you in any way about past due-tax issues. A professional expert will counsel you on the proper way to enroll for this program. The Voluntary Disclosure Program is not just open for the business sales tax offenders; it can be made for all tax types.

If you feel the need to review your business sales tax practices or have discovered errors and wish to make a voluntary disclosure, or are facing a dispute or audit regarding business sales tax, we can help you, call us at (212) 320-8191 or by emailing us at

Urgent Tax Services

6009 16th Ave,

Brooklyn, NY 11204

Ph. (212) 320-8191

Fax (646) 626-6447


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