If you are running a small business, you have an unwanted, not so silent partner that will dig into your pocket every year: the IRS.
The IRS wants to know what you are doing, how much you are earning and most importantly how much you are paying in taxes. And the tax agency is becoming increasingly aggressive in this regard. While the audit rate for individual returns has been hovering at far less than 1%, the audit rate for small businesses can be as much as 10 times higher.
The IRS is watching what you do, and if they think you are not paying your fair share they will certainly come calling. When that demand letter from the IRS arrives, knowing what to do next can make all the difference, and the more you educate yourself the easier it will be to deal with, and eliminate, the tax debt.
Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate and defend you against the IRS on your behalf. If you owe back taxes or are under audit, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about.
Small business owners are increasingly the target of enforcement efforts by the IRS, but the IRS does have some programs in place to make paying what those business owners owe easier. In some cases, you may be able to settle for less than what you owe but qualifying is not as straightforward as you might think.
For businesses that may be eligible, the assistance of a tax resolution specialist is crucial. These experts can help guide you through the process and make sure you qualify, so you can rest a little easier and get back to building your business.
Payment Plans/Installment Agreements
If you do not want to deal with additional hassles, it may make sense to pay the entire bill in full. If paying in full would be a hardship, the IRS does offer payment plans, and setting one up can make paying back what you owe easier and more financially palatable.
Keep in mind that interest will continue to accrue while the debt remains outstanding, and that is something to think about.
Offer In Compromise
If you’re under a lot of financial hardship, it may make more sense to try for
an offer in compromise (OIC), a special IRS program that could allow you to pay back less than you owe.
The offer in compromise program is a popular one with individual taxpayers and small business owners. If paying the entire amount would create a financial hardship for you, your family or your business, a tax resolution specialist can help you make the case to the IRS that you deserve a break.
What’s the best option?
Each of these options has its pros and cons, and it is important to understand how these programs work and who qualifies to use them. If your small business is in trouble with the IRS, taking the right action right away could reduce the amount you owe, give you some breathing room and allow you to focus on your clients - not on your taxes.
With so many small business owners now in IRS crosshairs, it has never been more important for freelancers, gig workers and the self-employed to have an advocate in their corner.
If you find yourself on the wrong end of action from the IRS, the steps you take next are critical. Trying to take on the IRS on your own is a dangerous, and potentially expensive, thing to do. You should always contact a tax resolution firm.
By working with an expert, you can gain access to vital information about small business settlement programs the IRS offers and the expertise you will need to settle your tax bill and get back in the good graces of the IRS. Time is of the essence when the IRS comes calling, and with the interest and penalty clock ticking you do not have one second to waste.