Even if you can't pay the IRS right now, here's what you should know.
This is a transcript from a short Q&A with Attorney Tony Ramos, where he answers some of the most searched questions about dealing with the IRS.
Delinquent Payroll Taxes: The Good & Bad News
If you owe the irs payroll taxes that you cannot afford to pay, I have some good news and bad news. First of all, the IRS takes payroll tax delinquencies very seriously. And I'll explain to you why in a moment. The IRS is very aggressive when it comes to collecting payroll taxes, because they're considered trust funds.
These funds are taken away from your employees, and then they're supposed to be sent to the IRS. If you don't send them to the IRS, the way the IRS looks at it, you it's not your money.
You took it away from the employees whom get credit for that when they would they do their tax returns, they get to, they get credited for these taxes that that the employer took away from them.
The bad news about owing payroll taxes.
The IRS is very aggressive, because as I said, this is not your money. And so the IRS is less workable when it comes to owed payroll taxes.
Also, once you begin negotiating with the IRS and you fall behind again on payroll taxes.
They don't even have to notify you to levy your bank account in this case. Unfortunately, this happens periodically when businesses get in trouble. And then more bad news...
More bad news.
Let's say you have a business entity (like a corporation) and cannot pay its taxes.
Even if you shut the business down and dissolve the corporation, the IRS can assess the payroll portion of the taxes owed; not the employer contribution.
They can asses the payroll portion that you deducted from the employees against responsible persons. This is usually the owners, the officers, people who have the decision making as to what creditors get paid.
Now for some good news.
If the IRS threatens to levy money out of your bank, business bank account for falling behind on these payroll taxes, or even income taxes, you can stop them and and file an appeal.
And that gives you three or four months (sometimes longer)to regroup and to be able to propose a plan that you can work this out. So that doesn't seriously adversely affect your business.
You have several rights available.
First of all, the Internal Revenue manual is sort of the the manual that the IRS officers use to deal with with taxpayers.
And you do quote chapter and verse to them. They almost always honor that, even though it's not law.
This is what the IRS uses for their officers to deal with taxpayers. You can also get protection from overly aggressive revenue officers, or collection Department employees.
There's two specific appeals that I like to talk about.
(CAP) Collection Appeals Program.
Here is a link to IRS documentation on CAP field collection appeals program.
When they threaten the levy or they've already levied you, you can go over the head of the employee dealing with and deal with a manager.
If the manager doesn't agree with you, you can appeal it. But it all gets resolved pretty quickly, usually within a week.
Sometimes you can get money back that's been levied.
There's a more formal procedure called the collection due process hearing, that by law, they have to stop all collection procedures.
And this is where you get an extra three or four months to regroup and to really understand your finances and propose some kind of settlement. You can also when you're doing the settlement agreements.
And I've done this with several of my clients that our employers get a cash cushion. You don't have to give up all your money that you have in savings because you have to continue to run your business.
If you can justify that there are times in your business where you need an extra you need that cushion, then they they'll work with your ledger, keep it.
There is no need to panic.
The bottom line is if you owe tax to the IRS as a business owner, and in particular payroll taxes. It's not time to panic, there are things that you can do.
So if this is something you might be interested in discussing with me, call 210-899-5383 for a free consultation.
And not only that, I will give you a free IRS strategy session.
After that consultation, I'll get on the phone with the IRS and I'll find out:
- exactly how much you owe in taxes,
- what type of taxes they are,
- whether whether levies are imminent, or
- the final notice have already been issued.
You'll walk away with a strategy a preliminary strategy which can be developed later and you'll know what you have to do in order to resolve your taxes with the IRS. Call 210-899-5383 and we'll talk soon
This is for entertainment purposes only.
Successfully dealing with the Internal Revenue Service is about knowing the laws and procedures that IRS employees must follow, and effectively leveraging that knowledge.
Want Me To Deal With The IRS Over Payroll Tax Issues?
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