Marani Brands Inc. (MRIB)

[Matthew Berg]

Excellent point Veronica. Payroll taxes are a totally different animal especially in smaller companies where bookkeeping is being handled by an employee versus ADP or an outside CPA. I have seen many small companies go under because payroll taxes are often the first place they skimp and it can escalate rapidly. The temptation to put off payment and use the cash for operations is significant when cash is tight. The other problem is that we're not talking about just the IRS and 941s. They also have to deal with the Franchise Tax Board and in California they are very aggressive. And you are also correct about collection. It's not like income taxes. The services have no tolerance nor sympathy for non payment of these taxes and because of the fiduciary responsibilities involved the company is often threatened in far more significant ways including criminal action. I can also tell you that $250,000 is certainly an amount they will pursue swiftly.

Just to give you an example, I had a self employed payroll tax underpayment of $147 in 2003 to the FTB that went unknown to me for years. Last year I got a notice from B of A that FTB seized $6,895 from my checking account for payment of the $147 + penalties and interest! Absolutely nothing I could do about it. It was non negotiable. And they didn't lien or freeze it. They simply took it.