Business & Employment Tax Matters

Business & Employment Tax Matters

Business tax disputes don’t announce themselves politely. Throughout his practice focusing on IRS controversies, Attorney Phillip Mixon has watched too many cases snowball from minor issues into major problems simply because business owners didn’t understand what they were facing.

Business owners often contact Mixon Tax Law when they’re already in deep water—facing Trust Fund Recovery Penalties, dealing with employment classification audits, or watching their business bank accounts get levied. Here’s the thing: most of these situations could have been avoided with proper legal guidance from the start. Phillip’s dual CPA and JD credentials give him a unique perspective on both the accounting and legal sides of business tax issues, which has proven invaluable in countless cases over the years.

What is Business Tax Law?

Business Expansion

Business tax law isn’t just about filing returns and paying taxes—though that’s certainly part of it. In practice, the firm deals with the intricate web of federal regulations that govern everything from payroll tax deposits to worker classification disputes. The Internal Revenue Code is notoriously complex, and the penalties for getting it wrong can be severe.

What makes business tax matters particularly challenging is that they often involve both civil and criminal exposure. When business owners fail to properly handle employment taxes, for instance, the government doesn’t just want the money back—they may pursue personal liability against company officers and impose penalties that can exceed the original tax debt.

Mixon Tax Law maintains extensive business tax law resources to help business owners understand their obligations before problems arise. Prevention, as they say, is worth a pound of cure.

Business & Employment Tax Services

After years of practice, the reality is clear: no two business tax cases are exactly alike. However, certain issues crop up repeatedly:

Trust Fund Recovery Penalty Defense

This is probably the most feared penalty in the tax code, and for good reason. When businesses fail to pay employment taxes, the IRS can come after company officers personally—even piercing the corporate veil. The firm has successfully defended numerous clients against TFRP assessments, often by challenging the government's determination of who was actually "responsible" for the company's tax obligations.

Employment Tax Compliance

Every business with employees must navigate a maze of withholding, depositing, and reporting requirements. Miss a deposit deadline by even one day, and penalties follow. Mixon Tax Law helps businesses establish compliant payroll procedures and handles correspondence with the IRS when problems arise.

Worker Classification Disputes

The line between employee and independent contractor has blurred considerably in recent years. Get the classification wrong, and businesses could owe years of back payroll taxes plus penalties. The firm regularly defends businesses in worker classification audits and helps establish compliant contractor relationships going forward.

IRS Business Audit Representation

When the IRS decides to examine business returns, having an attorney who speaks their language matters. Phillip's background at a previous employer's firm taught him how revenue agents think, which has been invaluable in negotiating favorable audit outcomes for clients.

Payroll Tax Crisis Resolution

Unpaid payroll taxes can quickly become a business-ending crisis. The IRS has extraordinary collection powers when it comes to trust fund taxes, including the ability to shut down operations. The firm works with businesses to negotiate payment plans and abatement of penalties while keeping their doors open.

Business Transaction Tax Planning

Whether buying, selling, or restructuring businesses, the tax implications can make or break the deal. Mixon Tax Law regularly advises clients on the tax aspects of corporate transactions, drawing on M&A experience from previous employer's firm days.

Quarterly Return Preparation and Review

Form 941 may look straightforward, but businesses have gotten into serious trouble over seemingly minor reporting errors. The firm prepares quarterly returns for select clients and reviews filings to catch potential issues before they become IRS problems.

Entity Structure Optimization

The way businesses get structured can have profound tax implications. Mixon Tax Law helps business owners choose the right entity type and, when circumstances change, restructure operations to minimize ongoing tax liabilities.

Understanding Trust Fund Taxes

Business Expansion

The trust fund concept catches many business owners off guard. Employment taxes withheld from worker paychecks don’t belong to the company—they’re government funds that businesses collect and hold temporarily. This trustee relationship means the IRS treats unpaid employment taxes as a breach of fiduciary duty, not just a late payment.

The quarterly filing requirements can be particularly tricky. Every business with employees must file Form 941 quarterly and Form 940 annually, regardless of their business structure. Miss a deadline or make a reporting error, and penalties start at hundreds of dollars and can quickly escalate into the thousands.

When businesses can’t or don’t pay their employment taxes, the government has a powerful weapon: the Trust Fund Recovery Penalty. Under Internal Revenue Code Section 6672, the IRS can assess this penalty against any person who was responsible for collecting and paying the taxes and who “willfully” failed to do so. The penalty equals 100% of the unpaid trust fund taxes, and it can’t be discharged in bankruptcy.

Worker classification issues present another common headache. The distinction between employees and independent contractors isn’t always clear-cut, and the financial consequences of getting it wrong can be substantial. Misclassified workers can trigger assessments for unpaid income tax withholding, Social Security, Medicare, and unemployment taxes—often going back several years.

Frequently Asked Questions

Business Tax Compliance & Process

It’s arguably the most dangerous penalty in the tax code. The TFRP makes company officers personally liable for unpaid employment taxes—essentially piercing the corporate veil. Business owners have lost their homes over this penalty. The key is mounting an aggressive defense early, challenging both the “responsible person” determination and the “willfulness” element.
It depends on the deposit schedule, which is based on historical tax liability. Most smaller businesses deposit monthly, while larger employers deposit semi-weekly. The critical thing to understand is that these aren’t suggestions—miss a deposit deadline, and penalties start accruing immediately. Two percent can turn into fifteen percent very quickly when deposits are late.
This is probably the most dangerous question business owners ask. The short answer is no—never skip payroll tax deposits. The government views this as stealing from employees, and they will pursue collection aggressively. If cash flow issues exist, contact legal representation immediately. Payment plans or other options may be available before digging into a deeper hole.
Absolutely, and it happens. The IRS has extraordinary collection powers when it comes to trust fund taxes, including the ability to seize assets and padlock doors. They view unpaid employment taxes as theft from workers, so they don’t hesitate. Early intervention is crucial—once seizure proceedings start, options become much more limited.

Legal Representation & Defense

In most cases, yes. Business audits are far more complex than individual examinations, and the stakes are much higher. IRS revenue agents are trained to look for issues that could generate additional assessments. Having experienced counsel means having someone who understands the audit process and can protect rights throughout the examination.
TFRP defense requires attacking both prongs of the government’s case. First, challenge whether the client was actually a “responsible person” with the authority to make financial decisions. Second, attack the “willfulness” element—the government must prove that the client knew about the tax obligations and deliberately chose not to pay them. Corporate structure, financial controls, and decision-making authority all come into play.
This distinction trips up many people. Someone can be a responsible person without being liable for the TFRP if they didn’t act willfully. Responsible person status is about having authority over the company’s finances. Willfulness is about knowledge and intent—did they know taxes were owed and deliberately choose not to pay them? Both elements must be present for TFRP liability.
Yes, but the timelines are strict. Taxpayers typically have 30 days to request an Appeals Office conference, and if that’s unsuccessful, they can petition the Tax Court. The key is acting quickly—miss these deadlines, and appeal rights are gone. Appeals Office conferences have produced good success, as they allow for more informal resolution discussions.

Worker Classification & Employment Issues

The IRS looks at three main factors: behavioral control, financial control, and the relationship between the parties. Do employers control how the work gets done? Does the worker have their own business? Do employers provide benefits? There’s no bright-line test, which is what makes these cases so challenging. The determination is highly fact-specific, and similar situations can go different ways.
It can get expensive quickly. Businesses will owe all the employment taxes they should have withheld and paid, plus penalties and interest. The good news is that if Forms 1099 were filed and there was a reasonable basis for the contractor classification, businesses might qualify for relief under Section 530. This can dramatically reduce the financial impact of reclassification.
Unfortunately, yes. Worker classification audits often cover multiple years, and assessments going back three or more years aren’t uncommon. The key is responding properly to the initial inquiry. These audits often start with a simple questionnaire, but don’t be fooled—how businesses respond can determine whether they’re looking at a minor adjustment or a major assessment.
Good documentation is critical, but it’s not just about having a written agreement. Look for evidence that the worker operates their own business—separate invoicing, their own tools and equipment, work for multiple clients, business licenses, separate business bank accounts. The IRS wants to see genuine business independence, not just a contractor agreement.

Business Structure & Tax Planning

Absolutely. S-Corporation owner-employees must take reasonable salaries subject to payroll taxes, while LLC members typically pay self-employment tax on their entire share of profits. The wrong entity choice can cost thousands in unnecessary taxes, while the right structure can provide significant savings. Entity selection is one of the most important tax decisions a business owner makes.
Tax issues often involve both accounting and legal considerations. CPA background helps understand the numbers and compliance requirements, while legal training is essential for defending against government enforcement actions. Many business tax problems require both skill sets—practitioners need to analyze books and records AND handle IRS negotiations or court proceedings.
Tax crises don’t happen overnight. They build up over months or years while business owners focus on other priorities. A quarterly review of compliance procedures can spot problems before they cost serious money. And here’s a hard lesson: when cash is tight, tax money isn’t available cash—it’s already spoken for. When problems do arise, early intervention is key—don’t wait until drowning to call for help.

Why Choose Mixon Tax Law

After years of working on both sides of complex tax matters—first at a previous employer’s firm advising corporations, and now defending businesses against government enforcement—Phillip has developed a deep appreciation for what business owners face when dealing with tax authorities.

Here’s what Mixon Tax Law brings to cases that’s different from most other law firms. First, background at one of the Big Four accounting firms provided insight into how large corporations handle tax compliance and controversy matters. Sophisticated strategies learned for dealing with complex tax issues now help smaller businesses compete on a more level playing field.

Second, dual CPA and JD credentials mean the firm can handle both the accounting and legal aspects of cases. When the IRS questions books and records, understanding of underlying accounting principles is there. When they threaten enforcement action, knowledge of how to protect legal rights is ready. Most importantly, strategies can be developed that are both financially sound and legally defensible.

Here’s what sets this practice apart:

Unique Dual Qualification

Both CPA and attorney credentials provide comprehensive expertise rarely found in one professional.

Previous Employer's Firm Experience

M&A background at a previous employer's firm brings Fortune 500-level strategies to middle-market businesses.

Personal Attention

Clients work directly with Phillip, not a junior associate or paralegal.

Specialized Focus

The practice concentrates specifically on business tax controversy and compliance matters.

Local Understanding

Deep knowledge of how Houston-area businesses operate and the challenges they face.

Learn more about Phillip's background and approach to see why businesses throughout Houston trust Mixon Tax Law with their most serious tax challenges.

Client Success Stories

Nothing speaks louder than results. Over the years, the firm has been privileged to help numerous business owners navigate serious tax challenges. Read detailed client reviews to get a sense of the outcomes achieved together.

About Mixon Tax Law Legal Practice

When facing serious business tax issues, businesses want an attorney who has actually walked in their shoes. Before law school, Phillip spent several years in public accounting, so he understands the operational challenges that business owners face every day.

His years at a previous employer’s firm in mergers and acquisitions were like a crash course in high-pressure tax work. When structuring deals worth hundreds of millions of dollars with closing deadlines that can’t move, a different approach to problem-solving develops. That experience of finding workable solutions under extreme pressure has served well in tax controversy practice.

Today, the practice focuses exclusively on IRS and state tax controversy matters. Phillip represents business owners in audits, appeals, and collection matters. He also handles defensive planning—helping businesses structure their operations to minimize future tax problems.

A smiling man with a beard wearing a tie, exuding confidence and professionalism.

Ready to Discuss Your Case?

Business tax problems rarely resolve themselves, and they almost always get worse with time. If dealing with an IRS audit, facing a Trust Fund Recovery Penalty, or worried about employment tax compliance issues, don’t wait to get legal help.

Contact the Houston office to schedule a consultation. Mixon Tax Law handles business tax matters throughout Texas and nationwide for federal tax issues.

Call (713) 814-4737 to discuss your situation. Phillip personally answers client calls whenever possible, and returns messages the same day. When dealing with tax authorities, time is often critical—don’t let procedural deadlines pass while trying to figure out options.

The office is located in Houston, with regular meetings with clients throughout Harris County, Fort Bend County, and Montgomery County. For complex federal matters, the firm represents clients nationwide. Distance isn’t an obstacle when dealing with federal tax authorities—they operate the same way whether clients are in Houston or anywhere else in the country.

Business Tax Resources and Insights

Knowledge is power when dealing with tax authorities. Mixon Tax Law maintains an extensive library of resources to help business owners understand their obligations and recognize potential problems early.

The firm’s business tax law blog covers current developments in tax law, IRS procedures, and practical compliance tips. Regular posts address topics that affect clients, including changes in worker classification guidelines, new IRS collection procedures, and strategic considerations for business transactions.

Business Tax | IRS | Local Tax | International Tax

Phillip also speaks regularly at continuing education seminars for CPAs and attorneys on business tax controversy topics. Staying current on legal developments isn’t just important for practice—it’s essential for providing the best possible representation to clients.

The Foundation of This Practice

The journey into tax law wasn’t exactly planned. After earning his CPA license, Phillip spent several years at a previous employer’s firm working on mergers and acquisitions for some of the largest companies in the world. The technical complexity of those transactions was fascinating, but what caught attention was the legal strategy involved in structuring deals to achieve optimal tax outcomes.

That experience taught something important: the best tax solutions require both deep technical knowledge and creative legal thinking. Understanding the numbers is necessary, but so is understanding how tax law actually works in practice—not just what the statutes say, but how courts interpret them and how IRS personnel apply them in real-world situations.

Today, that same combination of technical expertise and strategic thinking comes to every client matter. The specifics vary depending on whether dealing with a penalty assessment, an audit, or planning a transaction, but the same philosophy applies to every case: understand the problem completely, explore every possible solution, and fight for the best outcome achievable.

Clients appreciate having an attorney who can discuss their business operations knowledgeably, understand their financial challenges, and develop practical solutions that work in the real world. That’s what comes from combining previous employer’s firm technical training with focused legal practice—and it’s what sets this firm apart in the Houston legal market.