I Can’t Pay My Business Taxes: What Now?
Struggling with cash flow can put your business in a tough spot, especially if you owe taxes to the IRS or state. But don’t worry, there are services out there to help you deal with tax issues. Many new business owners focus on the positive aspects of their plans and might not think about what to do if things take a downturn and taxes become a problem. However, tax problems are quite common, and knowing how to handle them is essential for your business’s survival. If you’re having trouble with cash flow and can’t pay the IRS, don’t panic. While the IRS has authority to take action against those who don’t pay, they typically move slowly, giving you time to fix things before they take serious action. Everyone who earns enough money is required to pay taxes and file returns. Even if you’re struggling to come up with the money, you still need to file your business returns on time or ask for extensions. Tax authorities aren’t lenient with those who avoid them, so timely filing is crucial. If you can’t pay what you owe, it’s important to communicate with the tax authorities and explain your situation. But what if you’ve already made mistakes? You should take immediate steps to correct them. If you’ve missed filing deadlines, do it now. If you need help with filing, seek assistance. Ignoring demands from the IRS is never a good idea. They have various methods to collect money from you, including placing liens on your assets and seizing your business, home, bank accounts, and wages. Ignoring taxes can even lead to legal trouble and potential jail time without needing a court order. It’s crucial to understand the serious consequences of not paying taxes and to address any issues promptly.
Compounding Interest And Other Consequences
Even if you cooperate with the IRS, they’ll still ask for what you owe plus interest, which can add up fast. This interest can be as high as 14%, making your debt grow quickly. There are other reasons not to put off dealing with your debt. If you’re self-employed, not paying taxes can affect your Social Security benefits in the future. The IRS might also calculate your taxes for you, likely resulting in a higher bill since they don’t consider deductions like your own tax preparer would. They’ll even hold onto any tax refund you’re owed until your back taxes are paid with interest. Owing the government money can also hurt your credit score, making it tough to get loans or financing for your business. Cash flow problems are common for new businesses, but before you delay tax payments to buy time, think about the consequences. Do you really want to risk losing your personal property, savings, or future wages by not paying the IRS? Paying your taxes should be a priority. If you’re a business owner or self-employed and dealing with tax debt, it’s natural to feel worried. Start by seeing a tax preparer to explore your options. If the IRS has already reached out to you, getting advice from a tax professional is a good idea.
What IRS Resolutions Are Available To You?
It’s important for taxpayers to consider their individual circumstances and financial situation to determine what resolutions are available to them. It is in the taxpayers best interest to consult with a tax professional to determine the best resolution option for their situation.
- Installment Agreement: This allows taxpayers to pay their tax debt in monthly installments over time.
- Offer in Compromise (OIC): This program allows taxpayers to settle their tax debt for less than the full amount owed if they meet certain eligibility criteria and demonstrate an inability to pay the full amount.
- Currently Not Collectible (CNC) Status: Taxpayers who are experiencing financial hardship may qualify for CNC status, which temporarily suspends IRS collection actions.
- Innocent Spouse Relief: This option is available for taxpayers who believe they should not be held responsible for a spouse or former spouse’s tax liability.
- Penalty Abatement: Taxpayers may request relief from certain penalties, such as failure to file or failure to pay penalties, if they have reasonable cause for the failure.
Seeking Tax Relief?
At CuraDebt Tax, we have a team of tax professionals who are able to find the best IRS resolution available to you. Contact us to better understand your tax problems and to choose the best IRS resolution option. CuraDebt has been helping individuals and small businesses for over 22 years nationwide. As of May 2023 CuraDebt received a score of 5 out of 5 on CustomerLobby for a total of 1179 customer views. CuraDebt is an Accredited Member of the American Fair Credit Council. Contact us for a free consultation. 1-877-999-0486. Take advantage of exploring another option for free. Not only do we handle tax relief, we also offer debt relief.