Sam started his business. He formed the corporation, and his accountant timely filed his SubS Election. He owned all of the stock and was the President. His business was general contracting. He spent his days bidding on jobs and getting new work. Paperwork was not his forte. He didn’t bother to learn the rules about how payroll taxes worked. After about 4 years, he finally opened a stack of envelopes from the IRS and finds out that he needs to file and pay these taxes. He finds out that the company owes $1 Million in payroll taxes. He doesn’t have the money, and the company doesn’t have the money. Then to make matters worse the IRS shows up and assesses him with a 100% penalty for unpaid withheld taxes which totals about $700,000. Had he just made sure what the steps were to make payroll deposits as he went along and made sure that returns were filed, his business might still be operating. Oh and by the way, the 100% penalty against him personally is non-dischargeable in bankruptcy and even worse his home is not protected even though he owns it with his wife. See, U.S. v. Kraft