Payroll company mistake

[47Straight]

What is the name of your state (only U.S. law)? Georgia

Was doing my taxes this past weekend, and I owe $5,000 roughly. My jaw dropped expecting a refund. Upon further investigation, I noticed the payroll company only deducted 1.3% of my federal income tax on each pay check. They should have deducted more according to IRS Tax Table T-15. In return it has caused me to owe this money which I don't have. Do I have any legal grounds against the payroll company for not doing their job correctly?

 

[Mass_Shyster]

What is the name of your state (only U.S. law)? Georgia

Was doing my taxes this past weekend, and I owe $5,000 roughly. My jaw dropped expecting a refund. Upon further investigation, I noticed the payroll company only deducted 1.3% of my federal income tax on each pay check. They should have deducted more according to IRS Tax Table T-15. In return it has caused me to owe this money which I don't have. Do I have any legal grounds against the payroll company for not doing their job correctly?

If you can show that you properly filled out your W4, and they improperly withheld the incorrect amount, they may be liable for any penalties you owe for underpaying. Other than that, the taxes are owed by you, not the payroll company.

 

[47Straight]

Thanks Steve. I can prove both. I do realize that I am responsible for payment of the taxes.

I just want to know if I have any recourse against the payroll company for the suffering,stress, etc. and the hardship it is causing my wife and I. Thanks for your help.

 

[Zigner]

Thanks Steve. I can prove both. I do realize that I am responsible for payment of the taxes.

I just want to know if I have any recourse against the payroll company for the suffering,stress, etc. and the hardship it is causing my wife and I. Thanks for your help.

No.
Seems to me that you had $5,000 to spend during the year that you didn't expect. Furthermore, just a basic level of diligence would have allowed you to discover this error.

 

[CONFZD85]

How would someone proceed in a case where the W4 was filled out correctly and the payroll company IS responsible for the error? Would a request need to be made in writing to ask them to pay any penalties owed?

 

[tranquility]

Request in whatever way you feel most likely to get a response. However, you may have to sue them.

 

[Zigner]

If you pay the full amount before April 15th, no penalties will be due. Honestly, I don't even see that the employer would be responsible for penalties you incur if you pay late...

 

[tranquility]

Sure there would be penalties and interest if the OP did not pay in 100% of last year's tax or had not withheld 90% of this year's tax.

 

[LdiJ]

Sure there would be penalties and interest if the OP did not pay in 100% of last year's tax or had not withheld 90% of this year's tax.

Yep...there are not just penalties for paying late, but also penalities for under withholding.

 

[Zigner]

Thanks Tranq and LdiJ - dunno what I was thinking