Tips for Getting Current on Payroll Taxes

When businesses owe payroll tax debts, owners, officers, members do not know where to start in getting back into compliance with the Internal Revenue Service and State Employment Tax Agencies.

The following items are the things that should be conducted in order to get back into compliance and attempt to negotiate with tax agencies for any installment agreements, offers in compromise, hardships and other collection resolution options:

1) Pay the current payroll taxes and remain current. If you are not current the tax collection agencies will not negotiate with you. This is one of the first things that is required. What does this mean? Pay the current payroll period deposits and continue to pay.

2.) File all tax returns on time. If you have any outstanding tax returns, file them now. Never stop filing timely for you are creating a federal to file penalty of up to twenty-five percent when you have debt and do not file timely.

3) Analyze your financial situation. Both business and personal. Borrow money and pay down or full pay the debt. For those Officers, members, and others who are in financial control of entities. You can be held personally liable for unpaid payroll taxes. The government will expect you to borrow personal funds to pay the trust fund portion of the payroll debt.

4) Note: The trust fund portion is all the tax withholding and half of the social security taxes for each quarter that is unpaid. The Internal Revenue Service can provide this calculation. **Designate the money as “Apply to Trust Fund Only” on your check or money order. Do not send the money without designating the payment.

5) Open all letters and notices. Go to the post office for certified mailed letters. Many have important deadlines for appealing and other options that can benefit a company. Do not ignore them.

6) Once you analyze your financial situation. Cut down or eliminate

Non-essential costs or expenses. Credit card debt is not secured debt and will be disallowed on a financial statement. Unless, you can prove that the credit card is for necessary business expenses.

7) An installment agreement amount should be requested according to your business and personal financial statement indicators. Without unsecured debt. Follow Form 433B Collection Information Statement for Business and Form 433A Collection Information Statement for Individuals. Do not base the amount from the top of your head or forecasts.

8) Consult a tax resolution professional to represent you when in doubt or if it is too difficult for you to analyze your tax and financial situation. A tax consultant knowledgeable in tax resolution will get you the best option available accordingly.

9) Do not fall for fly by night tax resolution companies or promises of offers in compromises for pennies on the dollar. No one has a magic wand without analyzing your case in full and securing the necessary information and documentation required to determine client options.

Go to www.advocatetaxgroup.com for free resources and additional information.

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