5 Relatively Painless Ways to Erase Your Business Tax Debt

Business Tax Debt - Complete Controller

Unfortunately, there is not such great news you need to know about the IRS: the IRS is cracking down with a focus on audits and collections. Additionally, it appears that their primary target is business owners. Therefore, if you have been recently avoiding notices from the IRS regarding tax debt, you may want to consider taking steps to resolve any issues. If not, your business, as well as your personal life, may become much more complicated and stressful. The IRS has tremendous and expansive powers, for instance, to seize your assets. Here are some steps which can be taken to deal with IRS tax debt appropriately: ADP. Payroll – HR – Benefits

Know where you stand

Carefully review all letters from the IRS, along with your tax returns. It is quite possible that the agency you entrusted your taxes with may have made some errors. By reviewing these documents, you may ultimately reduce the debt you have. Consider gaining support from a tax professional. The potential savings you may gain is preferable to paying any additional fees.

Negotiate the penalties 

Penalties can spiral out of hand very quickly. For this reason, you must act very swiftly when dealing with IRS debt. You may also consider negotiating with the agency to lower, and sometimes even eliminate, any penalties if you provide a reasonable cause. Examples of this may include serious illnesses, difficult financial circumstances, and/or the destruction of your home or the business you are running. Furthermore, the IRS also has a program that offers relief to those who are facing the consequences with the agency for the first time.   LasPass – Family or Org Password Vault

Payment plan for business debt

After you become aware of what you owe, you can quickly create a working plan. One of the most common approaches is to set up an installment agreement. This arrangement can be as long as six years, and all payments should be made on a monthly basis while interest or penalties continue to accrue. Remember, this kind of agreement stops actions such as liens and levies. If you are indebted $50,000 or less, then this process is a viable option. It can also be done online; however, you must be in compliance with the IRS, ensuring that you make the proper tax filings, deposits, and withholdings.

Reduce business expenses

Take care to consider your operating costs carefully. Figure out the expenses you might cut out versus the services required for the daily operation of your business. For instance, must you pay for a subscription that you use infrequently? Are there some professional memberships that you can suspend temporarily until you get your finances back in order? Consult a professional accountant or utilize accounting software to predict the financial impact of cutting ancillary expenditures.    Download A Free Financial Toolkit

Other options

You most likely have seen the TV advertisements where a representative makes the claim that you can settle your IRS debt with “Pennies on the dollar!” Does this sound too good to be true? Unfortunately, this is most often the case. However, the IRS does have a program called “Offer in Compromise,” or the OIC. This allows you to pay off business debt at a discount. This process also involves releasing financial information with the forms 656 and 433. This will determine the amount which the IRS considers livable without causing financial restraints on the users. Keep in mind; the IRS rejects numerous submissions. Therefore, it is beneficial to consult with a tax professional who has complete knowledge of filling paperwork, along with navigating the IRS bureaucracy as well.

By using the five tips mentioned above, you can easily reduce any business debt you may have.

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