Gig Workers on the Radar: How On Demand Workers Can Reduce Their IRS Audit Risk
As the shift from traditional employment to self-employment and business ownership continues, many workers are finding themselves in a brand new situation. The IRS has noticed the shift to gig work, freelancing and self-employment, and their auditors and agents are increasingly focusing on those brand new small business owners.
The audit rate for ordinary individual taxpayers has less than a 1% chance of getting a notice from the IRS. For small business owners, however, the audit rate is on the rise, and if you work in the gig economy that means you.
The rising audit rate for small business owners is certainly cause for concern.
If you want to stay on the good side of the IRS, these strategies could greatly reduce your personal risk of an audit.
Track Earnings on the App or Platform
One of the biggest red flags for IRS auditors is unreported or misreported income. It is absolutely critical for all gig workers, freelancers and other self-employed individuals to track their earnings carefully and report them correctly.
Tracking those earnings does not have to be cumbersome, and many participants in the gig economy already make it easy. If you are working for an app-based service, you may be able to find your total earnings on the platform - no calculator or spreadsheet required.
If you’re not, it’s important to track all of your income on something like Quickbooks. That way, when the IRS asks you for more information, you have it ready.
Ask Small Volume Clients for 1099 Forms
A single gig worker can have dozens of individual clients, and that can make accurate accounting and tax reporting difficult. One of the best ways to close this gap is by asking every client to issue a 1099-MISC form showing how much was earned throughout the year.
Major clients may already issue these 1099-MISC forms, but smaller ones may not realize they have this kind of reporting responsibility. Asking them nicely and explaining the importance of accurate reporting could convince them that the form really is required.
Check with Payment Processors for Accurate Figures
Another easy way to keep track of your earnings is through the payment processor you rely on. Services like PayPal, Stripe and Payoneer allow clients to pay freelancers and gig workers quickly, but they also tally up the individual earnings and provide handy reports for those small business owners.
If you are unsure about what to report to the IRS, you can simply go into the payment processor app or website and tally it up. Some payment processors make it easy, with detailed reports, while others require a bit of sleuthing. Either way, you can probably get the information you need this way.
Keep Your Deductions to a Reasonable, Legally Allowed Level
As a gig worker you are essentially a small business owner, and that entitles you to a host of new tax deductions. From the car you drive to the electricity powering your home office, lots of things you use every day can be deducted to lower your final tax bill.
The problem arises when gig workers and freelancers get greedy, writing off personal items and services as business expenses and invoking the ire of the IRS in the process. If you want to stay off the tax collection radar, make sure the deductions you claim fall within reasonable limits. Outsized deductions are a huge red flag for auditors, and writing off too much could put you at the top of the list.
Make Your Estimated Payments on Time
If you only do a few gigs here and there, you may not have to worry about making estimated payments to the IRS. But as your business grows, chances are you will be required to make those estimated payments - or face additional penalties down the line.
For those who are required to make quarterly payments, writing those checks promptly is important, so mark your calendar and make sure you set aside enough money to pay the IRS. These quarterly payments are a way of life for the self-employed, and that includes a growing number of gig workers.
The gig economy is growing fast, and that is good news for those who long to be their own bosses. As more and more employees leave their jobs for lives of self-employment, the IRS is already taking notice, and that could be bad news for unwary and incautious taxpayers. The tips listed above can help you reduce your risk of trouble, so you can focus on building your business instead of worrying about the IRS.
Tax Scams You Should Be Aware of That Could Get You In Trouble With The IRS
Tax filing season is a source of stress for just about everyone. That extra stress and uncertainty ramps up and up, and you never know if you must write a check to the IRS.
You also do not know which threats will loom, and that lack of knowledge could put you at real risk. Tax scams have increased in recent years, but they tend to break down into four major categories. One of these tax scams can put you in real danger and can leave you on the hook with the IRS, owing thousands of dollars if you’re unlucky. Here are four tax scam dangers you should be aware of.
#1. IRS Impersonators
When tax season begins, fake IRS agents come out of the woodwork. Those phony IRS impersonators may flood your email inbox with threatening messages and text your smartphone with incorrect information.
Those IRS impersonators may call you on your landline or smartphone, ratcheting up the threats and the danger. From threatening arrest if back taxes are not paid to using hard sell tactics to get you to pay up, those impersonators can take a big bite out of your wallet.
If you want to stay safe, know that the real IRS never initiates communication via email, text, or phone calls. If there is a problem with your taxes, the IRS will send a good old-fashioned letter, so watch your mailbox and ignore everything else.
#2. Phishing Scams
Phishing scams are always going on, but they really ramp up as tax season gets underway. Those cybercriminals know that tax season is a stressful time for their victims, and that they may put their guard down if confronted with a sufficiently scary subject line.
It's always a good idea to treat unsolicited emails with a healthy dose of skepticism, but that's even more true when tax season is on the horizon. You should always investigate such messages thoroughly -- and never click on embedded links that could harbor malware and other threats.
#3. Fraudulent Filing
If you do not file your taxes quickly, cybercriminals may do it for you. Fraudulent filing has increased, upping the risk that you could be the next victim.
These fraudulent filers use Social Security numbers and other personal information they buy on the dark web. Armed with that information, they file fraudulent tax returns, claiming refunds they are not entitled to and funneling them to their own accounts instead of yours. The best way to guard against this risk is to file your tax return as quickly as possible and protect your personal information online
#4. Shady Tax Preparers
Sometimes the people you pay to prepare your taxes are the source of the scam. Shady unlicensed tax preparers mine information from their clients, keeping lists of Social Security numbers and other key information to perpetrate future crimes.
If you trust your taxes to a preparer who is less than honest, identity theft may not be your only problem. Those shady tax preparers may also commit fraud, making up deductions, claiming phony dependents, and ultimately getting you a huge tax refund you do not really qualify for. When the IRS catches the mistake, the tax preparer will be long gone, leaving you on the hook for penalties, interests, and the kind of stress only an IRS audit can provide.
Filing taxes is stressful enough, but falling for a scam could make your interactions with the IRS even worse. Cybercriminals see tax filing season as a golden opportunity, one they are ready, willing, and eager to exploit for their nefarious purposes.
If you want to protect yourself and your money, you must take a proactive approach to cybersecurity. Knowing the dangers is a vital first step, so keep a close watch on your information at all times.
Understanding a Notice of Federal Tax Lien and What to Do About It
Neglecting to pay your taxes can lead to serious consequences, and one of the most severe repercussions is the federal government filing a legal claim against all your current and future property through a federal tax lien.
In this article, we'll break down what a federal tax lien is and provide guidance on what steps you should take if you receive a certified letter indicating that you have one.
Please note that it's always advisable to seek the assistance of a specialized Tax Resolution Professional who can negotiate with the IRS on your behalf. If you'd like to schedule a free and confidential tax relief consultation, please contact us through our contact page.
What is a Federal Tax Lien?
A federal tax lien is a document filed with a county government (usually where you reside or conduct business) to notify the general public that you have an outstanding federal tax debt.
How Does It Affect Your Assets?
A tax lien attaches to all your assets, including property, securities, and vehicles. It also extends to any assets you acquire in the future during the duration of the lien.
If you sell any property while a federal tax lien is in place, the IRS will be paid before you receive your share.
How Does It Affect Your Credit?
Once the IRS files a Notice of Federal Tax Lien, it becomes public record. Credit reporting bureaus often pick up this information, which means that the federal tax lien will eventually appear on your credit report and could hinder your ability to obtain credit.
How Does It Affect Your Business?
A tax lien attaches to all your business property and rights to business property, including accounts receivable. This can significantly impact your ability to run your business normally and put you further behind.
What About Bankruptcy?
Filing for bankruptcy does not automatically eliminate your tax debt or the Notice of Federal Tax Lien. These obligations may persist even after the bankruptcy process.
Is a Lien the Same as a Levy?
The terms "lien" and "levy" are often used interchangeably, but they have distinct differences. A federal tax lien represents the government's legal claim or interest in all your property. However, the IRS does not sell off or forcefully confiscate your assets. Nonetheless, having the IRS place a chain on everything you own can certainly make your life significantly more challenging.
A levy, on the other hand, refers to the enforcement of the lien through the collection of taxes. This can include actions such as seizing funds directly from your bank account or garnishing up to 75% of your net paycheck.
What Should You Do Next?
According to the IRS website, "Paying your tax debt in full is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt." However, for most people, writing a check for the full amount is not feasible. This is where a tax resolution specialist can be of assistance.
Contrary to the IRS's advice, your initial step should be to contact a qualified tax resolution professional, such as ourselves. Dealing with the IRS on your own is like going to court without a lawyer—it's possible, but your chances of achieving a favorable outcome are slim.
A qualified tax resolution expert can create a resolution plan, immediately communicate with the IRS on your behalf, and initiate negotiations to alleviate your tax problem.
Feel free to reach out to our firm, and we'll be happy to schedule a confidential consultation without any obligation. During this session, we'll explain the options available to you for permanently resolving your tax problem.
Tax Resolution and Your Finances: What is an Offer in Compromise?
Dealing with tax debt can be incredibly intimidating. It's natural to feel overwhelmed and powerless in such a situation, but it's important not to let fear and helplessness paralyze you.
Every day you delay taking action, interest and penalties continue to accumulate, potentially causing your liabilities to skyrocket and wreak havoc on your financial stability. In this article, we'll discuss one of the many available options for tax relief called an "Offer in Compromise." But before we delve into that, if you're facing a tax problem, get in touch with our firm to schedule a consultation.
What Are Your Options?
Even if you believe it's impossible to repay what you owe, it's crucial to explore all available repayment options. While the IRS may be a formidable collection agency, they can be surprisingly reasonable when it comes to repaying back taxes and settling long-standing debts.
If you owe back taxes to the IRS or have unfiled tax returns from previous years, you may qualify for programs that make it easier and faster to pay what you owe. One such program is the offer in compromise, which allows eligible individuals to settle their IRS debt for significantly less than the full amount. However, qualifying for this program can be complicated, so the best way to determine your eligibility is by contacting our firm today.
An offer in compromise is a well-known but often misunderstood part of the tax code, and navigating its complexities can be challenging. Not all taxpayers will qualify for the offer in the compromise program, and even those who do may struggle with the intricacies of dealing with the IRS.
This is why it's crucial to work with a tax resolution expert when you have back taxes. Without an expert on your side, the IRS may reject your offer for a compromise, and the amount you owe could keep increasing due to additional penalties and interest.
If you've received a tax due notification from the IRS, you can't afford to wait. When the tax agency wants their money, they want it immediately, and without an offer in compromise, your options may become severely limited. The longer you wait, the more challenging your situation may become. However, hiring the right tax professional—one who specializes in dealing with the IRS—can turn things around.
An experienced tax resolution specialist possesses comprehensive knowledge of all IRS programs, including the offer in compromise option. Even if you don't qualify for an offer in compromise, a tax relief expert can help you explore alternative options, allowing you to settle your debt while still having enough money to sustain your life.
Few things in life are as daunting as owing money to the IRS. When that notice arrives in your mailbox, it's easy to panic and do nothing. However, this situation demands prompt action. The faster you act, the easier it will be to find a qualified professional who genuinely cares about your best interests. Once you've connected with a reputable tax resolution firm, you can work towards paying off your debt, achieving a fresh start with the IRS, and finally putting this unfortunate chapter of your financial life to rest.
Unexpected Tax Increases: Factors to Consider for Year-Round Tax Planning
Proper tax planning is a crucial aspect of financial management that should be addressed throughout the year. Waiting until April to assess your tax liability is a risky move. To ensure you keep more money in your pocket, it's essential to be aware of factors that can unexpectedly raise your taxes. Today we will explore five key factors that could potentially increase your tax owed at the end of the year. By being proactive and considering these factors, you can better plan your finances and mitigate tax surprises.
Factor #1 - Cashing in Your Retirement Plan:
Early withdrawal from your retirement plan, such as a 401(k), can lead to significant tax penalties. If you opt to receive the proceeds in cash instead of rolling them over into an Individual Retirement Account (IRA), you will be required to pay taxes on the withdrawn amount. Additionally, a 10 percent penalty may apply. By avoiding these pitfalls, you can safeguard a substantial portion of your hard-earned retirement savings.
Factor #2 - Working as a Freelancer:
While freelancing offers independence and flexibility, it can also introduce complex tax implications. Freelancers and self-employed individuals are subject to the self-employment tax, which includes both the employer and employee shares of Medicare and Social Security taxes. Failing to account for this tax burden and set aside funds accordingly can lead to unpleasant surprises come tax season.
Factor #3 - Failing to Take Your Required Minimum Distribution (RMD):
Retirement accounts, such as IRAs and workplace plans, require individuals to begin withdrawing minimum distributions once they turn 70. Failing to meet this requirement can result in substantial tax penalties. It is crucial to stay informed about RMD rules and ensure compliance to avoid unnecessary financial setbacks.
Factor #4 - Skipping Your IRA Contribution:
Opting to skip your annual IRA contribution can have unforeseen consequences for your tax bill. Before deciding to forgo contributing to your IRA, it is prudent to evaluate the potential impact on your overall tax liability. Running the numbers and seeking professional advice can help you make an informed decision.
Factor #5 - Paying Off Your Mortgage:
While paying off your mortgage may provide a sense of financial freedom, it can affect your tax situation. Mortgage interest is typically tax-deductible if you itemize your deductions. Losing this deduction could potentially increase your tax liability. While this shouldn't be the sole reason to keep a mortgage, it's an important consideration to keep in mind.
Seek Professional Assistance for Tax Debt Cases:
If you find yourself owing back taxes, it is crucial to seek professional assistance to navigate the complexities of tax debt resolution. Our firm specializes in helping individuals negotiate with the IRS and we can potentially settle tax debts for a fraction of the amount owed. Contact us today for a confidential consultation, and let our experienced tax resolution specialists guide you through the IRS maze, providing you with peace of mind.
Year-round tax planning is essential to minimize surprises and optimize your financial well-being. By being aware of factors that can unexpectedly raise your taxes, such as early retirement plan withdrawals, self-employment tax obligations, missed required minimum distributions, skipped IRA contributions, and the impact of mortgage payoff, you can take proactive steps to manage your tax liability effectively.
Remember, hiring a tax resolution specialist for IRS problems is crucial for protecting your hard-earned income and assets. Let us help you take back control of your financial life by reaching out to our firm today.
Avoid Tax Troubles: How Amended Tax Returns Can Save Your Day
Filing your tax return accurately is crucial to avoid unnecessary tax troubles. However, it's not uncommon to discover errors or overlooked information after you've already filed. Fortunately, the Internal Revenue Service (IRS) allows taxpayers to amend their returns using Form 1040X.
In this blog post, we'll explore how amended tax returns work, the importance of seeking professional assistance, and how our firm can help you navigate the complex world of tax resolution.
Uncovering Missed Income and Deductions:
Sometimes, taxpayers file their returns only to realize later that they omitted certain sources of income, such as earnings from temporary jobs or side gigs. This oversight becomes apparent when they receive a 1099 or a late W2 form indicating the income earned. Similarly, others may discover they were entitled to additional deductions or exemptions. For such cases, amending your tax return is the appropriate course of action.
Understanding the Timeframe:
The IRS allows individual income tax returns to be amended up to three years after the original return's due date. Form 1040X is the official document used for amending returns. While you can file an amended return on your own, it's strongly recommended to consult a tax resolution professional. They possess the expertise to handle multiple years of unfiled tax returns, potentially negotiate reduced payments, and save you from unnecessary headaches.
The Amended Tax Return Process:
Not all errors require filing an amended return. The IRS automatically corrects simple math mistakes. However, when there's a need to change filing status, income, allowable deductions, or credits, filing an amended return is essential. To initiate this process, you'll need to complete Form 1040X, which cannot be electronically filed. This is where the expertise of a tax professional becomes invaluable, as they can guide you through the intricacies of the form.
Proper Documentation and Explanation:
When completing Form 1040X, each amended tax year requires its own separate form, each of which must be mailed in its own envelope. The form provides space to explain the changes made, and it's important to clearly state the line numbers and reasons for the amendments. While you don't need to attach a copy of the original return, any additional IRS forms or supporting documents must be included to substantiate the changes.
Processing Time and State Returns:
After mailing your amended return, it may take several weeks for the IRS to process it. It's worth noting that amending your federal return may also necessitate changes to your state tax return, especially if the amendment involves reporting increased income. Consulting a tax resolution professional will ensure that all necessary steps are taken to address both federal and state tax matters.
Seeking Expert Assistance for Tax Debt Cases:
If you anticipate owing money to the IRS after filing your return, it's crucial to engage the services of experienced tax resolution firms like ours. Our tax resolution specialists posess specialized skills that go beyond what traditional accounting or tax law firms can offer. Our firm specializes in tax problem resolution and boasts a team of CPAs, EAs, and attorneys who can represent you before the IRS. Contact us today for a no-obligation confidential consultation, and let us help you explore permanent solutions to your tax problems.
In conclusion, amending your tax return can rectify errors, report missed income, or claim additional deductions. The process involves completing Form 1040X and mailing it to the IRS. While it may take time for the IRS to process your amended return, seeking professional assistance from a tax resolution expert ensures that the procedure is handled accurately and efficiently. Don't let tax troubles overwhelm you—reach out to our firm today and take the first step towards resolving your tax issues for good.
Taking Steps to Correct Errors on Your Tax Return
Preparing and understanding tax returns can be complex and challenging. Even professionals sometimes struggle to ensure every number and detail is accurate. Often, mistakes are only noticed after submitting the return online or sending it via mail, or worse, when the IRS sends a notice regarding discrepancies. If you find yourself in this situation, it's crucial to know what to do next.
Fortunately, there are several actions you can take. However, if you're unsure where to begin, it's advisable to seek assistance from a tax resolution professional. Our team of experts specializes in navigating the complexities of the IRS, providing you with peace of mind. Whether you owe back taxes or have outstanding tax debt, contact us today for a free consultation.
Common Types of Errors
The IRS scrutinizes each tax return for various red flags. Here are three common mistakes made by taxpayers:
Not reporting all income: Regardless of the amount earned, it is essential to report all income accurately. Unless you run a strictly cash-based business (which raises a red flag), the IRS receives duplicate copies of W-2, 1099, and other forms detailing your income. If your reported income does not match the IRS records, it can raise suspicion.
Overstating business expenses: Depending on your occupation, there may be legitimate expenses that your employer does not reimburse. If you operate a business, there might be a temptation to inflate deductions. While some deductions may be valid, it's important to adhere to the approved list and avoid claiming deductions far beyond the norm. Consult with a tax professional to ensure compliance with tax laws and prevent improper deductions on your return.
Math errors: Whether filing electronically or using paper forms, your information is entered into a computer system. Computers excel at mathematical calculations, making any errors or discrepancies stand out. While a math error may not necessarily lead to an audit, it can attract unwanted attention. Double-checking your returns and involving a qualified tax professional can help prevent such issues.
Filing an Amended Return - The 1040X
Individual income tax returns can be amended within three years of the original due date by filing IRS Form 1040X. This form allows you to provide the IRS with information on what was originally filed, the corrected details, and the reason for the changes. Additionally, it enables adjustments to personal exemptions, such as correcting errors related to dependents.
Here are a few tips for filing the 1040X form:
- Use a separate 1040X form for each year requiring corrections and send each form in its own envelope.
- Clearly indicate the tax year at the top of each form.
- Explain the changes and reasons for correction on the back of the form. Include any schedules, forms, or supporting documentation affected by the changes.
- If your federal corrections impact your state taxes, submit a corrected return for the relevant state as well.
- It is strongly recommended to consult a tax resolution professional for assistance with your amended return. They can help file multiple years of unfiled tax returns, facilitate settling for a reduced amount, and provide valuable guidance to help you avoid tax-related troubles.
You Have 3 Years
Many taxpayers only discover errors in their tax returns when preparing subsequent year's returns. These mistakes may come to light during discussions with tax preparers or through personal review. There is no specific time limit for correcting a return; amendments can be made whenever an error is noticed. However, the IRS generally accepts corrections up to three years after the original return's filing date.
The 1040X is a Paper-Only Form
Even if you typically e-file your tax returns, the 1040X form must be filed as a physical paper form.
The IRS does not currently accept electronic filing of the 1040X form. Pay attention to the correct mailing address for the form, as it differs from the address for regular returns.
If Correcting Mistakes Results in Additional Taxes Owed
If you discover a mistake on your tax return that underreports your tax liability, it is crucial to amend your return promptly. The IRS is likely to uncover significant discrepancies, such as unreported income from freelancing or self-employment, and may impose interest and penalties on the outstanding tax owed. By proactively addressing the error, you can minimize the impact of interest charges.
If you anticipate having substantial tax debt and owe more than $10,000 to the IRS or state and cannot afford to pay in full, lump sum, it is advisable to contact our firm for assistance. We specialize in helping individuals find tax relief and, in some cases, settle their tax debt for a fraction of the total amount owed. Don't hesitate to reach out to us for a resolution.
Correcting errors on your tax return is essential to maintain compliance with IRS regulations and minimize potential penalties. By taking the necessary steps to amend your return with the assistance of a tax resolution professional, you can ensure accuracy and alleviate any concerns regarding your tax situation.
Important Factors to Consider When Choosing a Tax Resolution Firm
Nobody wants to find themselves at odds with the IRS, yet countless taxpayers face this situation every year. With increasing enforcement efforts by the IRS, more individuals are receiving notices and communications from the agency, and you could be one of them.
If you receive a notice from the IRS stating an amount you cannot afford to pay, it is crucial to take swift action. While the temptation to do nothing or ignore the situation may arise, each passing day only worsens an already challenging predicament.
The good news is that you may not have to pay the full amount claimed by the IRS. There are several programs available to provide taxpayers with relief, often allowing them to settle their tax debts for considerably less.
However, to benefit from this financial relief, it is essential to find the right partner, and here are key factors to consider.
Tax Relief and IRS Negotiation Experience
When engaging a tax relief firm, you are essentially hiring a team of experts. It is vital to ensure that the professionals handling your case are fully equipped for the task at hand. Look for specific areas of expertise, such as former IRS agents, attorneys, and individuals experienced in negotiating with the IRS on behalf of taxpayers.
Size does not necessarily determine the quality of a tax relief agency. Some of the most reputable firms are smaller entities with extensive experience. Regardless of the firm's size, the crucial aspect lies in the tax resolution expertise possessed by the individuals working on your case.
Compassion and Understanding
Dealing with the IRS is not just a financial challenge; it can also be an emotionally taxing experience. Receiving a letter from the IRS, demanding immediate payment or notifying you that you are being audited, is bound to cause distress and unease. Working with a compassionate and caring tax relief firm can greatly alleviate the emotional burden.
While expertise and capability should not be compromised, there is no reason why you cannot have both. During the selection process, seek someone who genuinely cares about your well-being and situation. Opt for the firm that you feel most comfortable working with.
Recent IRS Negotiation Success Stories
The IRS is an immense agency, and the tax code is constantly evolving, leading to increasing complexity. Consequently, past experience may not always be relevant. When assessing tax relief firms, look for recent testimonials and case studies showcasing their successful negotiations with the IRS.
Having a track record of positive outcomes demonstrates their proficiency and indicates that they understand the intricacies of dealing with the IRS. Working with such experts can provide peace of mind and facilitate the resolution of your tax problem.
Receiving a notice from the IRS can be a daunting experience, but it does not have to spell financial devastation. You do not have to live in fear of each visit to your mailbox. By knowing how to find an excellent tax relief partner, you can take control of your situation.
Reach out to our tax resolution firm, and we will schedule a free, confidential consultation without any obligation. During this meeting, we will explain your options comprehensively and guide you towards a permanent resolution for your tax problem.
Small Business Owner: Owe Payroll Taxes? Here’s What To Do.
Unpaid payroll taxes are a serious matter to the IRS and are some of the worst kind of back taxes you can owe. If you’re a small business owner with a payroll tax problem, read on to learn what you can do to avoid the IRS crippling your business or worse, shut your business down completely.
Already in payroll tax trouble? Contact us to schedule a free, no-obligation consultation and let’s get your payroll tax issue resolved.
Why Small Business Owners Get Into Payroll Tax Trouble In The First Place
It’s hard being a small business owner today, trying to pay your employees their paychecks every week, and pay the IRS all those payroll taxes!
A lot of times when money is short, you pay the employees first. It’s a natural thing to do—you need to take care of your employees, even if you have to skip paying yourself! Besides, if you don’t pay them, they’ll quit and you will have to hire new people all the time.
It can seem easy to “just pay the 941 taxes next pay period” and give yourself a little cash flow cushion, but skipping paying your employees payroll tax deposits is never a good idea.
What happens too often is 1 pay period turns into 2, and 3, and 4, and eventually you’re so deep in payroll tax debt that the only thing you want to do is completely ignore your problem.
Except the IRS doesn’t care about your financial problems. They just want you to pay your payroll taxes!
The IRS doesn’t care if you can’t pay your employees. They don’t care if they put your employees out on the street. They don’t care if you can’t collect your receivables. They don’t care if one of your largest and best customers just went “belly-up”. All they care about is you have money that belongs to them and they will do whatever they have to, even put you out of business, to collect it. They don’t care who you are, or even what business you are in.
Penalties are The Kiss Of Death When It Comes To Back Payroll Taxes
Penalties for failing to file and pay your payroll taxes are the “kiss of death” for any small business owner. They tack on penalties totaling 33% in just the first 16 days! And it doesn’t stop there. The IRS adds interest on top of the penalties too. It is not uncommon that a payroll tax liability doubles in short order. And if you don’t pay them or work something out, they will shut you down! It’s much less work for the Revenue Officer, as most are lazy, to simply close you down than work out an arrangement with you.
They IRS Will Collect Or They Will Shut You Down
It’s as simple as that. The IRS is the most brutal collection agency on the planet. They have more authority than the President of the United States! And they have all the ways and means to do whatever it takes to collect what’s owed to them. You didn’t wake up in the morning, go to work, and say to yourself, I’m not paying my payroll taxes because you didn’t want to. The money simply wasn’t there. It’s not your fault. One week you’re short of cash. It was a slow week, a customer’s check bounced, or any number of legitimate reasons that just prevent you from paying the IRS. You’re a good person. You figure you will make it up the next week. But then next week comes and goes, and you realize you still don’t have enough money to make that payroll tax deposit. And then the entire situation starts “snow-balling” into an avalanche.
Should You Call The IRS To Get Your Payroll Issue Fixed?
If you were to call the IRS, and were able to get through after waiting on “hold” for an hour or two, and try to explain your situation—you might as well have a conversation with the wall—because they don’t care. The IRS representative that you’re talking to probably makes less than $20 an hour, and is poorly trained. Do you think they ever had to make a payroll in their life? Do you think they know what it’s like running a small business? Do you really think they will have any sympathy for you?
Not only is the answer “NO” but they can also dictate the fate of your case. What they will try to get, while you’re on the phone, is all your personal and financial information. They want to know where you bank; they’ll want to know all about your customers who owe you money, they’ll want to know about the value of all your assets, like your home, cars, motorcycles, etc. Why? Because now they have all the information they need to levy your bank accounts, take your receivables and seize your property.
Now that you know you shouldn’t be talking to the IRS because they are not going to help you, you might be wondering what you should do? Where should you turn for help? They smartest thing you can do to protect your business and family is to have someone represent you—someone who deals with the IRS for a living. You need to get help—but not just from anyone—you need help from someone who is an experienced competent professional, and deals with the IRS every day, helping small business owners keep their businesses and settle IRS payroll tax problems.
If you were charged with a serious misdemeanor or felony, would you go to court without a lawyer? You don’t want to represent yourself before the IRS either. You need professional, expert representation.
Reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Our expert tax resolution professionals know how to navigate the IRS maze.
Once you decide to retain us, we step into your shoes and protect you from the IRS’s abusive tactics. We take over all communications from the IRS on your behalf. You don’t have to speak with the IRS anymore. We do. Not only that—they are not allowed to talk to you once you’ve signed our Power of Attorney! Once they realize you have someone on your side protecting you, who knows their tricks as well as they do, they have to step back and follow the law. Not only can we protect you from the IRS harassing you, calling you, and showing up at your front door, we can get those penalties reduced and in some cases completely removed!
Contact us now and lets get your payroll tax issue resolved!
Do You Owe Money to the IRS? Possible Tax Resolution Strategies to Set Your Mind at Ease
Even for honest taxpayers, the IRS can be extremely frightening. Unlike most other government agencies, the IRS has unbridled power to attach your wages, freeze your bank account and even confiscate your property, and that is enough to send a chill up the spine of any taxpayer.
If you receive a letter from the IRS saying that you owe additional taxes, it is important not to panic. It may be a frightening situation, but there are things you can do to settle your tax debt and get back on the good side of the IRS.
Taxpayers do have options when resolving tax disputes and paying additional taxes due, and simply knowing what those options are can set your mind at ease.
Here are three strategies you can use to resolve your tax debt and get on with the rest of your life. Not all of these options will be right for everyone, but it is important to be an informed taxpayer.
Review the Amount Owed And Your Tax Return In Question
If the IRS says you owe money, you should not simply assume they are right. The tax agency does make mistakes (a lot), as do tax preparers and ordinary taxpayers.
Whether you filed your taxes on your own or hired someone else to do it for you, it is important to examine your return and compare what you find with what the IRS is claiming. It pays to seek professional help for this tax review, even if you originally filed your own taxes. A professional with IRS experience may be able to uncover errors and inconsistencies you would have missed on your own, and that could end up saving you money.
There is no guarantee this review will eliminate the extra taxes the IRS says you owe, but it never hurts to be sure. There have been many cases in which taxpayers who thought they owed money to the IRS ended up owing nothing - or even being due a refund from the IRS.
Set Up a Payment Plan
Getting a notice of additional tax due from the IRS is frightening, especially if you cannot afford to pay what the agency says you owe. Keep in mind, however, that you do not necessarily have to pay the bill all at once.
The IRS is often willing to set up payment plans with taxpayers, and those payment plans could make paying what you owe easier and less stressful. Once again, it is a good idea to seek professional help and guidance here - the IRS can drive a hard bargain, and you do not want to end up with a payment plan you cannot afford and wind up defaulting on it.
If you fall behind on the payment plan you agreed to, you could be subject to additional enforcement action, including the tax agency garnering your paycheck or seizing funds from your bank accounts. Getting the help of a tax resolution professional up front can help you avoid these serious consequences.
Explore an Offer in Compromise Settlement
If you are truly unable to pay the money the IRS claims you owe, you may be able to work out a (much) smaller lump sum payment. The IRS may not advertise this program, but they are often willing to work with taxpayers by accepting lesser amounts, especially if those taxpayers have little in the way of equity in assets and a limited income. Sometimes these settlements can be for a fraction of what’s owed, if you qualify. We offer a free no obligation consultation to find out if you qualify.
If you plan to explore this last option, it is critical that you work with a tax resolution expert. An offer in compromise can be extremely complicated, with legalese and language that can be difficult to understand. You do not want to make a misstep here, and you want to ensure that you are only paying the lowest amount, allowed by law, in settlement of your tax bill.
Few things are as frightening as getting a letter from the IRS. That official-looking letterhead is bad enough, but what the letter says is even worse. If you receive such a letter, you need to take positive steps right away. Ignoring the situation will make it worse and it won’t go away, and the sooner you start exploring your tax resolution options the better off you will be.
