One of the struggles of being a business owner is juggling the expenses and demands of the business. Sometimes, through no fault of their own, business owners fall behind on their taxes. The law requires business owners to periodically make deposits with the IRS for employment taxes but problems such as cash flow can crop up and prevent business owners from fulfilling this obligation. This is turn can lead to tax liability with the IRS. Since business and payroll taxes usually involve relatively large sums of money, the IRS is particularly keen to collect payroll tax arrears.
Why The IRS Is So Strict
Payroll tax debt is among the worst forms of debt. In brief, payroll taxes cannot be eliminated in bankruptcy, and the IRS is extremely aggressive in pursuing payroll tax violators. In fact, an ongoing failure to remit payroll tax obligations can even result in the forced closure of the business. After all, the continued operation of a business that willfully fails to pay payroll taxes would only result in additional payroll tax violations. Accordingly, the IRS is fairly aggressive in payroll tax collection and is quick to assess the trust fund recovery penalty to the responsible officer.
The future may seem bleak if you’re a business owner facing mounting payroll tax liability. Don’t be discouraged though because there are still options for resolving payroll tax debt.
Tax Debt Help
If you’re already facing payroll tax debt, then one of your first priorities is to consult an experienced tax lawyer regarding your options for payroll tax relief. An experienced tax lawyer will be knowledgeable regarding the requirements for tax resolution strategies and whether your case qualifies for an applicable solution. In order to choose the best course of action, you’ll need to find a seasoned pro to help you with your decision.
Tax Debt Solutions
An installment plan is a common solution to tax debt and a business owner may opt for it if they believe that the business will get better if allowed to continue operating. Making an offer in compromise is also another option. Take note that the requirements for individual taxpayers and business taxpayers may be different for each. Lastly, if the business is going through bankruptcy proceedings, some tax debt may be forgiven or reduced by the court.
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