What to Do if You're Behind on Your Payroll Taxes
It's common for companies to fall behind on payroll taxes, especially when big accounts can't pay their bills on time, or at all.
I hear it all the time lately, "My practice is having a problem with unpaid payroll taxes because some of our largest (medical) providers are not paying us on time, or not at all, or they are filing for protection from creditors under the US bankruptcy laws. I'm scared to file our payroll tax returns and have the IRS show up at my practice and close me down. Any suggestions?"
Yes, many. The best advice that I can give may not be what you want to hear, but it will stop you from getting in deeper trouble with the IRS and it should help to save your practice.
The best way to start is get current on your payroll taxes, even if you can't pay back taxes!
This is what you need to do. First, prepare all old payroll tax returns and file them with the IRS even if you can't pay a penny of the taxes owed. Second, pay your current payroll taxes. Third, stay current with all future payroll taxes deposits and filings. If you do these things you substantially reduce likelihood of the IRS closing your practice.
If you cannot follow these steps, then your practice and your personal assets are in serious jeopardy. The IRS is unreasonable to business owners who fall behind in payroll taxes and will pierce the corporate veil and go after all employees who the IRS considers "responsible" and "willful". However, there is no guarantee that your practice is completely safe when you owe payroll taxes.
Seek professional help and avoid direct contact with the IRS.
Dealing with the IRS on payroll tax issues is a very delicate situation. Usually, what one tells the IRS revenue officer in the first few minutes of the conversation dictates one's fate and future. One wrong answer – even though it is the truth – could spell the end of a business. The IRS will get you to incriminate yourself. The revenue officer performs much less work if he closes you down than if he tries to help to keep you open. I strongly suggest that any practice or business with payroll tax problems seek immediate professional advice and avoid any direct personal discussion with the IRS.
Avoid talking with the IRS or meeting with them by yourself. Do not let them speak to anyone on your staff. Their simple little questions are nothing more than a fishing trip in which you and your company are the fish. You have many rights that are protected by law.
Take control of the situation, it'll open up more options for you!
Why wait until it gets so bad that you have to do whatever the IRS wants? If you take control of the situation and do something about your IRS payroll tax problems, you'll have many more options available to you. If you wait for that knock on the door or, even worse, wait until your bank account or accounts receivable are levied, then your options are limited and you are close to being put out of business by the IRS.
Recent changes in tax laws provide more methods to appeal IRS decisions than ever before. The problem with some of these methods is that most people have never heard about them and they are only available for a limited time. The clock is ticking on some of the best deals and programs available with the IRS.
There are options, programs and deals that may help you.
Possible options and strategies may include requesting abatement of all penalties (and in some cases, interest) due to reasonable cause. This avenue in and of itself may reduce your tax bill by 25-33%. Another option is to negotiate a properly structured payment plan that enables the company to operate while paying off the delinquent tax bill, however you must remain current on all future filings and deposits/payments, or all bets are off. Still another option may be to prepare and submit an Offer in Compromise, due to doubt as to collectability. If you fit the criteria and formula, the IRS may settle for a whole let less than what's owed.
Finally, know your rights! The IRS will do what's best for the government, not you!
Know your rights! You have the right to be represented by an attorney, CPA or Enrolled Agent (who are also Certified Tax Resolution Specialists) when you are dealing with the IRS. Be sure to consult with an expert before you say anything to the IRS that you may later regret. Remember, no matter how nice the IRS revenue officer may seem, they are paid to look out for the government's interest, not yours!
About Michael Rozbruch, CEO and Founder of Tax Resolution Services
About Michael Rozbruch, CEO and Founder of Tax Resolution Services, Co., Michael Rozbruch is one the nation's leading experts on solving individual and business IRS tax problems. As a Certified Tax Resolution Specialist (CTRS), CPA (licensed in the state of Maryland), and member of the American Society of IRS Problem Solvers, he and his company have represented thousands of taxpayers who owe the IRS, but simply cannot afford to pay. Michael has been a guest speaker on over 200 radio stations across the country and has been interviewed on numerous TV news programs as a nationally recognized expert guest speaker.
I hear it all the time lately, "My practice is having a problem with unpaid payroll taxes because some of our largest (medical) providers are not paying us on time, or not at all, or they are filing for protection from creditors under the US bankruptcy laws. I'm scared to file our payroll tax returns and have the IRS show up at my practice and close me down. Any suggestions?"
Yes, many. The best advice that I can give may not be what you want to hear, but it will stop you from getting in deeper trouble with the IRS and it should help to save your practice.
The best way to start is get current on your payroll taxes, even if you can't pay back taxes!
This is what you need to do. First, prepare all old payroll tax returns and file them with the IRS even if you can't pay a penny of the taxes owed. Second, pay your current payroll taxes. Third, stay current with all future payroll taxes deposits and filings. If you do these things you substantially reduce likelihood of the IRS closing your practice.
If you cannot follow these steps, then your practice and your personal assets are in serious jeopardy. The IRS is unreasonable to business owners who fall behind in payroll taxes and will pierce the corporate veil and go after all employees who the IRS considers "responsible" and "willful". However, there is no guarantee that your practice is completely safe when you owe payroll taxes.
Seek professional help and avoid direct contact with the IRS.
Dealing with the IRS on payroll tax issues is a very delicate situation. Usually, what one tells the IRS revenue officer in the first few minutes of the conversation dictates one's fate and future. One wrong answer – even though it is the truth – could spell the end of a business. The IRS will get you to incriminate yourself. The revenue officer performs much less work if he closes you down than if he tries to help to keep you open. I strongly suggest that any practice or business with payroll tax problems seek immediate professional advice and avoid any direct personal discussion with the IRS.
Avoid talking with the IRS or meeting with them by yourself. Do not let them speak to anyone on your staff. Their simple little questions are nothing more than a fishing trip in which you and your company are the fish. You have many rights that are protected by law.
Take control of the situation, it'll open up more options for you!
Why wait until it gets so bad that you have to do whatever the IRS wants? If you take control of the situation and do something about your IRS payroll tax problems, you'll have many more options available to you. If you wait for that knock on the door or, even worse, wait until your bank account or accounts receivable are levied, then your options are limited and you are close to being put out of business by the IRS.
Recent changes in tax laws provide more methods to appeal IRS decisions than ever before. The problem with some of these methods is that most people have never heard about them and they are only available for a limited time. The clock is ticking on some of the best deals and programs available with the IRS.
There are options, programs and deals that may help you.
Possible options and strategies may include requesting abatement of all penalties (and in some cases, interest) due to reasonable cause. This avenue in and of itself may reduce your tax bill by 25-33%. Another option is to negotiate a properly structured payment plan that enables the company to operate while paying off the delinquent tax bill, however you must remain current on all future filings and deposits/payments, or all bets are off. Still another option may be to prepare and submit an Offer in Compromise, due to doubt as to collectability. If you fit the criteria and formula, the IRS may settle for a whole let less than what's owed.
Finally, know your rights! The IRS will do what's best for the government, not you!
Know your rights! You have the right to be represented by an attorney, CPA or Enrolled Agent (who are also Certified Tax Resolution Specialists) when you are dealing with the IRS. Be sure to consult with an expert before you say anything to the IRS that you may later regret. Remember, no matter how nice the IRS revenue officer may seem, they are paid to look out for the government's interest, not yours!
About Michael Rozbruch, CEO and Founder of Tax Resolution Services
About Michael Rozbruch, CEO and Founder of Tax Resolution Services, Co., Michael Rozbruch is one the nation's leading experts on solving individual and business IRS tax problems. As a Certified Tax Resolution Specialist (CTRS), CPA (licensed in the state of Maryland), and member of the American Society of IRS Problem Solvers, he and his company have represented thousands of taxpayers who owe the IRS, but simply cannot afford to pay. Michael has been a guest speaker on over 200 radio stations across the country and has been interviewed on numerous TV news programs as a nationally recognized expert guest speaker.
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