IRS Business Tax Debt
Writen by Sergio Melendez | Last updated 12/09/2023
IRS Business Tax debt guide
Do you have a business that is in tax debt with the IRS?
So you have been running a business, in which, you have been juggling the many responsibilities from ordering supplies, managing employees, contracting with vendors, negotiating business matters….(writing blogs) oh so many!
On top of it all, you fell behind on some of the various Business Taxes. Business Taxes range from being due quarterly, to annually. A qualified & experienced Tax Attorney dealing with Business Tax will help the burden of dealing directly with the IRS. The Following are the Common Types of Business Taxes:
Income Tax ( C Corporations & Self Employed)
Employment Tax ( Form 940)
Payroll Tax ( Form 941)
Civil Penalties ( Can be 100% of the Actual Tax)
Informational Returns ( Forms W2, W3, 1099, 1096)
If the taxes are not paid, the IRS will take collection actions on the balances owed. The IRS assigns the collections to either 1. Automated Collection System (ACS) or 2. Field Collections. Dealing with ACS of the IRS is a million times better than dealing with the Field Collections. Field Collections will assign An IRS Agent to collect the deb. The title of the agent assigned is a Revenue Officer “ RO”. The RO will have jurisdiction over your account and will have full authority to:
Levy on Accounts Receivable
Levy on Bank Accounts
Levy on Merchant Accounts
File Federal Tax Liens
Forced Asset Sale ( Property)
Harassing Business Visits
A Levy or Garnishment is an action taken by the IRS when they legally place a hold on your money, and that money is sent to the IRS as payment for delinquent taxes.
The Collections dept of the IRS does not care why you owe the balances, they are only tasked to collect. To challenge the amount owed, the dispute will have to be filed with the appropriate dept, such as the audit dept or accounts management.
If your business can not pay off the balance, there are several solutions that are allowed by law. A qualified Tax Professional, such as An Enrolled Agent, CPA or Tax Attorney can fully represent you with the collections matters. ( Hint: Semper Tax Relief Specializes in Resolving Business Tax Issues . When you hire a power of attorney, the IRS will still send out notices, however, the primary point of contact will be your power of attorney.
Solutions
Resolving the Balances owed would require several steps prior to the IRS accepting a resolution. The key to resolving the issues to be informed & be organized. The recommended steps to resolution would be the following:
Get Organized. If you are using spreadsheets and shoe box accounting it is time to do things different. Time to formally get the right firm to maintain your books. The IRS will seek for the business to disclose Current Profit & Losses, proof of Income, Proof of expenses, and disclosure of Bank Accounts.
File all missing & delinquent returns. The Missing returns are mandatory to get filed in order to request Resolution.
Make Timely Deposits ( Estimated tax Payments). These payments may be required for certain taxes, such as the Payroll Tax. However making these deposits absolutely help to now owe additional amounts on future filed returns.
Once the Business is in the right track with the organization and complaint with the filing requirements and estimated tax payments, the resolution for all the balances will be based on the Business Ability to Pay. The resolution may include:
Offer In Compromise
Partial Pay Installment Agreement
Audit Reconsideration
Installment Agreement
Amended Tax Returns
Tax Court Appeals
Federal Tax Liens Appeals
Currently Non-Collectible Status
If you made it this far and still need additional guidance, we can offer a free consultation. We can be reached 949-484-0184
How will you resolve your business tax issues?
