The IRS has filed court documents that accuse Harmon-Baert Associates, a payroll company in Saco, of failing to submit tax payments on behalf of its client companies even though Harmon-Baert allegedly took the money from its clients' accounts. IRS investigators have already identified nearly three dozen companies that believed Harmon-Baert was paying their payroll taxes and filing the proper paperwork with tax agencies. The agency''s preliminary investigation found at least $1.1 million in payroll taxes had not been paid by Harmon-Baert on behalf of at least 34 clients.
"Depending on the individual circumstances of these small businesses, if the allegations are true, the potential tax liabilities they owe to the IRS could be substantial enough to threaten their ability to survive," said Senator Collins. "In light of this possibility, I urge the IRS to help mitigate the impact of these situations, as they have done in other instances when otherwise honest taxpayers have been victims of similar fraud."
The following is the text of Senator Collins' letter to the IRS Commissioner:
According to recent news reports, Harmon-Baert Associates, a payroll company in Maine which recently closed its doors, may have failed to remit taxes deducted from the accounts of its clients. If these allegations are true, hundreds of small businesses in my home state could face assessments for tax liabilities they thought they had already paid. Obviously, many of these small businesses will find it difficult to make good these tax obligations without some forbearance.
I understand that when similar situations have arisen in the past, the Internal Revenue Service has taken steps to help mitigate the impact on unsuspecting taxpayers. I am hopeful you will do the same today. Specifically, I ask that you inform IRS collection personnel of the situation which appears to have developed with regard to the former clients of Harmon-Baert Associates, and temporarily suspend collection actions against former clients while IRS personnel consider the individual circumstances of each taxpayer. I also ask that the Service make a special effort to provide these taxpayers with timely guidance and information regarding the collection process and alternatives, particularly with regard to the rules and regulations pertaining to "offer and compromise".
I thank you for your attention to this important matter.