When many businesses start to have financial problems one of the first things that happens is the failure to pay payroll taxes or file its payroll returns on time. This is all too common!
To begin, the IRS will begin by mailing a series of letters reminding taxpayers of the late or delinquent filing of the returns or payroll taxes. Similarly, ridiculously high penalties will begin simultaneously.
The Bank Levy
When the not-so-friendly reminder letters have no response (as they most often do), the IRS will take more serious actions in the enforcement of this collection. Collection activities generally begin with placing a lien or levy monies from taxpayer’s bank accounts. A levy is where the IRS contacts the taxpayer’s financial institutions and demands the release of monies necessary to satisfy all or a portion of the tax obligations. Your bank accounts are generally frozen until the funds are released.
Who Cares – You’ve Got No Cash
To the extent there is not enough cash to satisfy the debt, the IRS may also levy business assets including accounts receivable, equipment, automobiles, etc. Just when things are not bad enough, the IRS is contacting your customers demanding payment of taxes. Good luck trying to salvage this business relationship!
Trust Fund Recovery Penalty
When all else fails, the IRS will look beyond the business to any and all individuals that may be responsible for the filing of tax returns or the remittance of payroll taxes. These “responsible persons” include business owners, managers and even employees who have financial control over bank accounts and the hiring and firing of employees. It generally does not matter that the business or its owners have filed bankruptcy, or one person is more responsible than another for this obligation. The IRS will seek collection from any and all available sources for the payment of these taxes.
Businesses owing payroll taxes is a very serious matter … perhaps, much more serious than any other back taxes you owe. If you’re a month or two behind, you can usually catch up. Any longer, you’ve got a real problem!
Get Professional Help
Don’t just call the IRS and tell them you’re just a little bit behind. Get professional help! Get tax relief when you need it. We’ll get you the additional time you need … just without all the hassle of a tax examiner coming to your business, auditing your books and possibly being shut down.
You have rights! Most importantly, you have the right to professional representation. In my 20 years of experience, the IRS agents actually prefer to work directly with the professional. Don’t be a victim! You can stop the IRS dead in their tracks by simply requesting additional time to have representation. Its your right. Use it wisely.
What You Can Expect Us to Do
The first thing you can expect is a short financial analysis. An analysis to see exactly what the business can pay and when. We’ll also look to see exactly who the responsible persons are and how we can shield them.
Next, we’ll be looking to see what we can do to stop the “bleeding” … that is, can we stop the problem from continuing. If the IRS thinks the problem will pyramid, or continue to future periods, you’re at great risk. If we can confine the problem to the “past” your chances of a successful tax problem resolution are far greater.
Third, we’re going to look at compliance. Have you filed all your past tax returns? Quarterly payroll, annual payroll, income taxes, etc. You may have tax problems from the past you don’t even know about. Think you don’t? Think again. Most of our clients do. You don’t want to have an old tax problem creeping up that can stop you from reaching a settlement. You need to be sure.
Next, we’re going to look at the penalties. What are the circumstances underlying why you didn’t or can’t pay your back taxes? Can we get the penalties abated? Can we get the penalties reduced? Did you make an error or did you simply not have the money to pay? What’s your history with paying taxes? Was this an isolated circumstance?
Successful tax resolution calls for professional tax problem solvers with the knowledge and experience to thoroughly know tax law and IRS procedure … a working knowledge and experience with working with the IRS most every day. Your accountant may not have what it takes. Carefully evaluate your team and decide. If we can help, give us a call.