Tax Debt Solutions for Business Owners

Small business owners have been hit hard by the recession that began in 2008.  Thousands of small business owners have gone bankrupt or are just barely hanging on waiting for the economy to turn upward. We understand the difficulties of conducting your business and trying to keep up with your taxes.  It’s easy to miss a quarterly estimated payment and have that snowball into a substantial liability.  And then, the letters and phone calls start from the IRS and state tax authorities. The key is to act before the IRS imposes personal civil penalties on you, such as the Trust Fund Recovery Penalty (TFRP), which can be nearly impossible to remove.

Several approaches may be taken to solve your tax problem.  A general overview is presented below to show you the range of possibilities.  The approach that’s right for you will depend on many factors including your current income, net worth, age, and any other special circumstances that are affecting you.

Levy Release For Business Owners

A levy may involve assets being frozen at your bank, business assets being seized, payroll wages being garnished from your check, or all of the above.

Most levies require some type of action and additional information from the taxpayer in order to be released. You may be required to submit your current financials to the IRS, get current with estimated tax payments, or establish an installment agreement to pay your back taxes.  Time is of the essence so the sooner we can assess your situation and negotiate a solution with the IRS; the sooner the levy will be released.

Streamlined Installment Agreement for business owners

This is a payment plan of 60 months or less for taxpayers who owe less than $25,000 and can afford to pay their debt over this time frame.  These agreements can be setup quickly and you will not have to provide financial and personal information to the IRS. There are even new IRS provisions that will get a lien off of your credit report using this program without first having to pay your back taxes in full.

“Currently Not Collectible” status

If we can show that you cannot pay your tax debt due to an economic hardship and the IRS agrees with the evidence we provide, then your account will be deemed Currently Not Collectible. Once this is established, the IRS will cease all collection activities including levies and garnishments. The 10-year statute of limitations on tax debt collection continues to run while your account is in this status. So if the IRS cannot collect the tax you owe in this period, your tax debt will expire and you will owe nothing to the IRS. However, if your financial position improves; you don‘t file returns on time; or you owe more taxes on future returns; the IRS can remove your account from this status and begin their collection activities once again.

Regular Installment Agreements for business owners

Unlike the Streamlined Installment Agreement, described above, that is limited to a pay back plan of 60 months or less, a Regular Installment Agreement can run for the remainder of time on your Statue of Limitations, which can be as long as 10 years. There are several alternatives, including plans where your payments are lower initially and higher in later years and a negotiated option where less than the full balance due is paid through monthly payments.  In any case, you will have to supply full financial documentation to substantiate your current income and expenses and these will be compared with the allowable national standards in arriving at a solution.

Offer-in-Compromise Program

This IRS program allows qualifying taxpayers to pay a fraction of their tax liability as full and final settlement of their tax debt.  Although this is a popular program, the qualifications are stringent and many taxpayers do not qualify. Essentially, taxpayers must prove either 1) they do not have the income, net assets, or future potential to repay the debt or 2) that the tax liability was erroneously assessed in the first place.  Substantial documentation is required for this program and the process is quite lengthy, taking 9 to 12 months. (Beware of any tax resolution company that says they can tell whether or not you qualify for this program after a 30-minute free consultation.  If your offer is not accepted by the IRS and you have no grounds for appeal, you will have wasted lots of time and money and you will not be able to reapply to this program using another tax resolution firm!)  In spite of the time, complexity, and foregoing warnings, this may be the best solution for certain taxpayers and we will be happy to explore this option with you.

As you can see there are quite a range of options for settling your tax debt issues.  Some can be accomplished quite quickly; others require extensive documentation and can take months.  The best next step is to discuss your individual situation with one of our Tax Specialists so we can craft a solution that is tailored to you.  Just call us at 1-855-375-5400 or complete the Free Consultation Form and we will contact you.

Don’t face the IRS alone. Business owners,  let ASAP Tax Relief tailor a tax debt solution for you.