Do you own a small business? Are you currently behind on your tax obligations? Managing your taxes is one of the most difficult parts of owning a business. Your cash flow may not always be consistent and you may sometimes need to make tough choices about which bills to pay. However, tax bills are always due, even if you don't have the cash on-hand to pay them. It can be easy to get behind on your tax obligations. If you're behind, you have options available. Here are a few tips on how you can manage your small business tax debt:
Stay in touch with the IRS. You will likely get lots of letters, and maybe even some automated phone calls, from the IRS about your debt. These letters and calls could go on for months or even years before you hear from a live collection agent. However, if the IRS never hears from you, they will at some point increase the intensity of their collection efforts. They could seize assets, garnish wages, or even shut down your business.
The best way to avoid this is usually to maintain an open line of communication with the IRS. Let them know when you're planning on making a payment. Keep them apprised of your situation and your ability to pay. If they have notes in their system from you, that could delay or even prevent a ramp-up in collection efforts.
Set up a payment plan. The IRS likely knows that if you couldn't pay your tax debt when it was due, you're also likely not going to be able to pay the full amount now after it's accumulated interest and penalties. That's why they often allow business owners to set up payment plans. You can pay your tax debt off over a few years with monthly payments. The interest won't stop accumulating, but the penalties probably will. Figure out how much you can afford to pay on a monthly basis, and then discuss it with the IRS.
Negotiate an offer-in-compromise. The IRS often works with too few resources and staffers. If you can prevent them from having to dedicate resources to debt collection, they'll likely be receptive to anything you offer. That's why they have a program called offer-in-compromise. With an offer-in-compromise, you basically negotiate a settlement of your debt for an amount that is less than the total obligation. You make a one-time, lump-sum payment and they eliminate the debt.
Figure out what you can afford and then contact them to begin negotiations. If you have cash on hand to make the payment, you may save yourself a considerable amount of interest and penalties.
You may also want to work with an experienced tax attorney. They can help you decide which option is right for you and can even negotiate with the IRS on your behalf.
For a tax attorney, click on this link http://www.wflaw.net or do an online search.Share