You run a business. Your sales have decreased, profit gains were down and cashflow has turned negative. You are in short of funds to pay your bills/vendors and your payroll taxes is due this week as well. You might have a temptation to hold paying 941 employment taxes and pay your staff members only their net pay. You want to use that tax money to pay the majority of your bills. Because the IRS appears far away from your world of business, so why not just forget about them? You could catch up paying off the past dues few months later once your cash flow gets better right? Wrong.
Well should you be reading this, I could perhaps guess what happened. Presuming your bookkeeper did not embezzle your pay-roll tax deposit (which is actually a different type of payroll tax issue), the money you were expecting to settle the Internal Revenue Service (and everyone else) didn't arrive just like planned for or as hoped for. When did they come or as soon as the sales improves,you attempted to pay the pending payroll taxes as far as possible - you tried to keep everyone happy.
The IRS give high priority to collecting unpaid payroll taxes and any kind of willful attempt to evade taxes in any manner is viewed as a serious offense. If you miss paying, the IRS won’t come immediately knocking the door. However, when the IRS finds that you are not making payroll tax deposits on time, they will quickly demand all pending taxes together with their interest and penalties. These can very quickly mount up into a huge tax debt and become insurmountable to repay. When you don’t have a lump sum that big, you have to look for alternative options. If you fail to act immediately to solve payroll tax problems, the IRS aggressive collection action pushes you to lose your company entirely. Alright, so what you need to do?
There are few things that you must know. If you have a viable business that is going through problems with cash flow, the IRS has got a vested interest in keeping that organization afloat! They would like to see you make money again in your business so that they can collect unpaid pay-roll taxes as much and as quickly as possible. The IRS can even recommend you take a loan to pay your debt while simultaneously they might file a federal tax lien against your business and property, that can make it tough to get finance.
There are solutions out there that you can use to proactively resolve your payroll tax issues. Apart from paying your back taxes outright immediately, you could be eligible for alternative solutions like negotiating an Offer in Compromise, Abatement of Penalties due to reasonable cause and installment agreements. Negotiations may include having your federal tax lien removed when it hampers in receiving a loan to pay off your taxes. Also look for options to halt the assessment of trust fund taxes.
But, when you're unable to make revenue and profits in spite of months of hard work, your business will probably be regarded as not viable. And to top it all off, the Internal Revenue Service doesn't look kindly on individuals who isn't able to pay their payroll taxes. They just want their taxes regardless of how terrible your scenario is. In the event the IRS can’t get their payments, they'll move to close your business and sell your assets. Remember, unpaid payroll taxes cannot be discharged with bankruptcy.
We have helped businesses throughout the country settle back payroll taxes and get aggressive Revenue Officers to back off so a fair deal could be figured out. A deal which will put an end to your nights without sleep. Then something we always hear - it isn’t exactly how much you payback to the IRS. We understand the most important thing is that you feel like you are in control over the situation and can have your business back on track . Regardless of whether you're “in business” or “out of business” we could help you to put your pay-roll tax issues behind you!