Back Payroll Taxes: Settling Your Small Business’ Debts
If you’re a small business owner with tax debt, you may be worried about the IRS’ next step and how it might impact your business’ bottom line. This is a real concern for many business owners as the stiffest penalties from the IRS like a tax lien or tax levy can literally mean closed doors. Back payroll taxes are some of the most serious and common tax problems that a small business can face. The IRS generally takes a hard look at small businesses as they are one of the largest sources of uncollected taxes.
Consequences of Back Payroll Taxes
Unpaid back payroll taxes do not go unnoticed by the IRS, and they have a lot of power when it comes to collection methods. The IRS has the unyielding power to shut your business down, without obtaining a court order and can even intercept funds from your customers to you. In addition, the penalties for payroll taxes are extremely high and can make a bad situation worse. These penalties include failure to file, failure to deposit and failure to pay. And, not filing can actually be considered a felony. The bottom line is that if you are a small business with back payroll taxes, do not delay! The time to settle these debts is TODAY….before the long-term viability of your business is compromised.
Settling Small Business Tax Debt
If you’re a small business owner with any type of tax debt, you can settle this debt before the IRS makes its next move. Here are some of your options:
1. Installment agreement:
If your business owes less than $50,000 and you can pay the tax debt in 72 months or less, you can very likely apply for what is known as an installment agreement. This gives you the chance to pay a portion of your debt each month, rather than all in one lump sum. The catch is that all of your returns must be current. If you owe more than $50,000, you may still qualify, you may just need to provide more details about your financial situation.
2. Offer in Compromise:
As part of the Fresh Start Program, the IRS has made it easier for small businesses to apply for an Offer in Compromise, which allows you to settle your debt for less than you owe if you are simply unable to pay it. If the IRS thinks that it is unlikely that your small business will be able to pay the debt, they may agree to an OIC.
3. Do not ignore:
If you are receiving written notices from the IRS about back payroll taxes, do not ignore or hope that these threats will go away. The best way to manage the situation is to face it head on as soon as possible so as not to accrue additional debt.
4. Get help:
Partnering with a tax firm that specializes in helping small businesses get out from under back taxes is likely a very wise move. This expertise and experience can help you navigate this situation without compromising the viability of your company.
Success Tax Relief can sit down with you, go over all of your tax records and help you develop a plan for negotiating with the IRS in a way that will protect your business. For more information or to schedule a free consultation, call our team today at 877-825-1179.