I came across new study this week in the article Small Business Owners Struggling with Finances with all too familiar tone. Massachusetts Mutual Life Insurance Company surveyed 1,600 business owners in the U.S. and published the results in Business Owner Perspectives: 2011 Insights in an Uncertain Economy. The study found that 28% of those surveyed says that it is all they can do to keep up with everyday business expenses, let alone think about their future.
One of the biggest challenges business owners face is staying current with payroll taxes. Once you fall behind, the problems tend to have a snowball effect and multiply rapidly. 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.
The best advice that I can give is to get current on your payroll taxes, even if you can’t pay back taxes. This will stop you from getting in deeper trouble with the IRS and it should help to save your business. How do you do this? Follow these steps:
1. Prepare all old payroll tax returns and file them with the IRS even if you can’t pay a penny of the taxes owed.
2. Pay your current payroll taxes.
3. 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 business and your personal assets are in serious jeopardy. Dealing with the IRS on payroll tax issues is a very delicate situation. I strongly suggest seeking immediate professional advice from a Certified Tax Resolution Specialist and avoid any direct personal discussion with the IRS.
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.
Some tips to keep in mind:
- Avoid talking with the IRS or meeting with them by yourself.
- Do not let them speak to anyone on your staff.
- 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.
- Remember that there are options, programs and deals that may help you. Some examples:
- Requesting abatement of all penalties (and in some cases, interest) due to reasonable cause.
- Negotiate a properly structured payment plan that enables the company to operate while paying off the delinquent tax bill,
- Prepare and submit an Offer in Compromise, due to doubt as to collectability.
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, 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.
Tags: back taxes, Certified Tax Resolution Specialist, IRS, michael rozbruch, payroll tax issues, Taxes
