If you have ever run a business, and if you ever ran a little bit short in the cash flow department, you likely know the temptation of paying your employees their net pay but shorting the government its "fair share" in the form of 941 payroll taxes. It is sort of like a guaranteed loan — with a 100% acceptance rate. All you need to do is borrow a little bit from your payroll taxes, and then get caught up when your cash flow improves. We get it, it is a "Hail Mary" pass of the business world.
Well if you are reading this, I can probably guess what happened. Assuming an employee did not embezzle your payroll tax deposit (which is a different type of payroll tax problem we discuss here), the cash you were expecting to pay the IRS (and everyone else) did not show up exactly as planned for or as hoped for. And then when you did get money, you tried making it go as far as possible — to try to keep everyone a "little happy".
Then you find out, the IRS doesn't like getting just some of its payroll taxes, the IRS wants all of its payroll taxes. Now you have late payroll deposit penalties that have gone from a slight problem to a scary the-world-is-going-to-end-problem. So what can you do? Can IRS payroll tax problems ever be settled in a manner that doesn't require a deal with the devil?
You can get a settlement for IRS payroll tax problems.
This is what you need to understand. If you have a viable business that is experiencing a downturn, the IRS has a vested interest in seeing that business succeed! The IRS wants your business to succeed enough so that you can repay as much of your back payroll taxes as possible. There are solutions available that can take into account your current payroll tax deposits, your reasonable business expenses, and normal cash flow variances.
What type of solutions are there to IRS payroll tax problems? We look to collection holds, installment agreements, and offers in compromise on back payroll taxes. Sometimes a settlement may include getting a notice of federal tax lien removed if it is interfering with your ability to get financing. Also, you must take into account any Trust Fund Recovery penalties.
Now, if your business is not viable — that means no matter what you do, it will always continue to lose money — you need to think about ways to limit the damage it is doing to you. Regardless of whether or not you have a payroll tax problem, a business needs to generate profits! Does it make sense to work hard and go backward?
Gaining control again
We have helped businesses across the country settle back payroll taxes and get aggressive Revenue Officers to back off so a fair deal can be worked out. Something we always hear — it isn't how much you pay back to the IRS. But rather, we know the most important thing to you is that you feel like you are back in control. Get your business back so that you can take care of the people who are loyal to you. If you need assistance, contact us. We can help.