At BMA Small Business Payroll, we believe your payroll dollars, especially all local, state, and federal taxes due, belong to you. This is why we never use a not-so-secretive practice known as tax impounding.
When you sign a power of attorney agreement with a payroll service provider, you allow access to your company’s bank accounts as well as check-signing authority. This doesn’t sound harmful just yet, except for one detail never shared: Many payroll bureaus transfer the money designated for payroll taxes into an interest-bearing bank account and let it sit there until payment is due.
And guess what? There are no rules or regulations in our industry regarding your tax dollars resting comfortably in a separate account not controlled by your company. We don’t wish this upon you, but it’s possible your money is being used to help grow your payroll bureau’s business, cover its own payroll, or even fund a Ponzi scheme. And who do you think is ultimately responsible when tax fraud occurs and the IRS comes a knocking for its delayed share of your tax liability? That’s right—you are, not your payroll service!
When you partner with BMA for small-business payroll services, you will never need to worry about being exposed to the potential risk of tax fraud. We consider tax impounding an unethical action; it’s an unsavory practice that makes us cringe. BMA Small Business Payroll isn’t interested in making money on your money. The source of our profits is our services.
Instead of “caveat emptor” (let the buyer beware), this famous Latin phrase should be updated to “caveat emptor fraus publicanorum” (let the buyer beware of tax fraud).