The Internal Revenue Service (IRS) frowns on businesses that have failed to remit their payroll taxes. Once detected, such a business may be faced with severe penalties. If your business is guilty of this, it is recommended that you seek out a Top-Rated Tax Firm to work with in order to resolve this problem as soon as possible.
What Are the Consequences of Unpaid Payroll Taxes?
Unpaid payroll taxes put your business in jeopardy, especially as the IRS takes this offense seriously. If you have been identified to have unpaid payroll taxes, the IRS will launch a collection effort and also launch all the possible legal attacks on you to ensure that your business pays back all that is being owed.
If you are unable to settle the debt in payroll taxes, the business owner may also face other stringent and more complicated punishments like prison time. Generally, the IRS could also fine the business owner for up to 33 percent of what is being owed in unpaid taxes and in some cases, the worst-case scenario may witness the business owner losing the entirety of the business.
Why Businesses Become Tax Delinquent
Almost all businesses at some point have become tax delinquent. While the delinquencies may not be as a result of the business owner’s direct fault, it may be due to the unpaid debts which have been owed to the business.
When faced with such situations, the government expects that businesses should pay out such taxes from their pockets, a move which may inconvenience the business owner, thus, leaving the business to be tax delinquent.
While you seek out a Top-Rated Tax Firm for the process of resolving your unpaid payroll taxes, below are some of the common ways you can approach and resolve this problem.
Take Action Immediately
Once you have realized your tax defaults, it is recommended that you take action as soon as possible, as this can shield you from a whole lot of financial inconveniences. A good way to go about dealing with this condition is to consider all the possible options you can explore including setting up a payment plan, which will see to it that you clear all the defaulted payroll tax. In addition, you can also reach out to a Top-Rated Tax Firm for professional help in dealing with such situations as this.
Become Current on Your Past Tax Returns
Dealing with the IRS is no simple task and this is why it is recommended that you should gather all the necessary documents to prove that you, indeed, have been paying your taxes over the years. If you haven’t, now is a great time to begin doing so. You can begin by filing the most current of your tax returns and work your way back through the defaulted years. It is recommended that you do this as soon as possible to protect you from losing your business to the IRS.
If you are unable to work your way through the backlog as quickly as you would like to, it is recommended that you should set aside some money to pay off the most current ones first and then make payments on the rest of the backlog.
Avoid Contacting the IRS on Your Own
A major mistake you can make is to contact the IRS on your own to resolve all unresolved payroll taxes. In some cases, IRS agents may interrogate you, leading you to make statements that can further implicate you and put you in bigger trouble with the IRS. Instead, it is recommended that you first speak to an experienced expert in tax resolution, as they are in a better position to offer professional advice and ensure that your interests are well-protected.
Hire a Top-Rated Tax Firm
Hiring a Top-Rated Tax Firm is one of the best decisions you can make when you are faced with unresolved payroll taxes. Specialists are capable of devising ways to make sure that all back payroll taxes are taken care of to prevent sanctions and other fines from the IRS.
When working with a professional, it is also possible that they may be able to help you with the process of penalty abatement, that is, they could help you avoid paying penalties and interest.
Pay Up the Current Payroll Taxes
When dealing with unpaid back payroll taxes, you should endeavor to show good faith by first paying off the current amount owed in tax. Doing this will take care of your current payroll tax while you devise a way to work through the debt and pay it off.
File Form 433-B
Form 433-B is one that allows you to disclose business information like income, expenses, assets, and debts to the IRS. This form is available online on the IRS website. You should endeavor to submit this form, as the IRS will not negotiate on the remainder of what is owed in the absence of this form.
Provide the IRS With All the Necessary Documents
As part of the process of resolving all unpaid back payroll taxes, it is recommended that you make available all the necessary documents requested by the IRS including the recent payroll summaries, copies of monthly expenses incurred by your business, bank statements, year-to-date profit and loss statements, account receivable aging reports, and other required documents.
Request an Agreement for Installments
Once the IRS has agreed to allow you to pay the backlog in installments, be sure to request proof of this arrangement in writing and make sure that you honor the agreement by making payments when due.
