IRS Payroll Tax Debt-- Impact on Business.

Owing payroll taxes can impact your business and financial future. There are penalties and interest that are billed for not filing a payroll tax return by the due date, not paying federal tax deposits according to the federal tax deposit rules, failure to pay for non-payment of balances overdue, compound interest is added to unpaid balances. No straight calculation for interest. Numerous notices, letters, telephone calls and personal contact by Internal Revenue Service Collection Officer are the ways that the IRS attempts to notify you and collection the payroll taxes that are overdue. Once your company owes payroll taxes for a pay period, file the tax return by the due date. This prevents a failure to file penalty which can be billed at a maximum amount of 25% of the tax balance. Pretty high penalty for not filing by the due date. Once a tax return is filed, the next action is for the IRS to create a tax bill for the balance, penalties, and interest. Then, the account accrues penalties and interest. Thus, you wind up paying a lot more than the actual tax. An automated collection system (computer) issues up to four notices of tax balances due. Numbers are usually L501 through L504. The Notice of Intent to Levy L11 is the letter that will affect your finances and potential collection actions by IRS. Such as issuance of a garnishment (levy) and filing of a Notice of Tax Lien recorded at the county recorder or Secretary of State for Corporations, Partnership, and LLCs. The levies will impact your bank accounts, accounts receivable, pensions, social security, and other income sources. Notice of Federal Tax Liens will affect your credit score and ability to secure loans. These are recorded to notify potential lenders, creditors that you owe the IRS and that lien is there to protect the governments interest in your property or rights to property. Visit from an IRS Collection Officer to your last known address for your business or residence if needed. The Collection Officer will do all they can to find you and or your assets to initiate any seizure and sale for those assets that have sufficient equity and value to implement a seizure and sale via auction. Unless, you negotiate a secure an installment agreement, hardship, offer in compromise, abatement of penalties, file amended tax returns accordingly. Too many options for resolution exist to cover on this article. Therefore, very few people or businesses get away from paying their tax debts for the IRS has up to 10 years or more to enforce collection. The Collection Statute usually ends 10 years from the date the tax assessment (bill) is created. However, there are processes and procedures that extend the collection statute. Such as leaving the country for extended period, filing of Bankruptcy, Appeals, Tax Court filings, signing a collection waiver, and more. One must remember that there is always a solution for resolving taxes. The right solution varies according to each case cause of delinquency, compliance with filing and paying requirements, financial situation, audit reconsiderations, amended returns, original tax return filing to correct tax returns created and filed by the IRS under the Internal Revenue Code 6020(b). There are more than 26 Collection Processes and Procedures that the IRS can implement to impose filing requirements, payment of taxes and collection of debts. You can view these in the Internal Revenue Manual Part 5, Legal Reference Guide, Internal Revenue Code, and more. Seeking professional assistance from Enrolled Agents, CPA or Tax Attorneys is the best way to attempt resolution of tax debts.

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