Falling behind on your tax payments can be a veritable nightmare: with the threat of fees and other forms of penalization looming over your head, it is incredibly important to take steps now to rectify your situation with the IRS. If you find yourself in this case, however, not all hope is lost: with guidance from a properly certified accountant, and a carefully-controlled repayment plan in place, you can effectively deal with your business’s back taxes in due course, without causing any additional issues for your company. As with many problems within the business world, a proactive approach to solving this problem will save you time and money in the future, and will get you back on track to paying your taxes annually in full to avoid future issues.
Penalties from the Internal Revenue Service: Motivation to Resolve Your Tax Issues
When it comes to paying overdue taxes, did you know that the Internal Revenue Service reserves – and often executes – the right to charge your company interest that compounds per year on your owed taxes? Furthermore, the amount you owe may be adjusted for inflation, adding additional costs to your company’s tax issues. The amount that is added in terms of penalties is not small: taxes can be charged an interest of five percent or more, on a monthly basis, and increasing over time to eventually reach twenty-five percent per month of interest on top of your owed statement. Furthermore, you can expect to face an additional 0.5 – 1 % of your owed amount tacked onto your tax bill, as a failure-to-file penalty.
Even though your taxes might be business-related, the IRS reserves the right to also place a lien against your personal property as the business owner, such that you might face losing your home if you have a tax issue with your business. You might also have to pay based on your current wages, leaving you little flexibility in terms of how to deal with the owed amount and pay it on your company’s own schedule. Without a doubt, it makes sense to resolve your issue as soon as possible: since taxes are dealt with on a case-by-case basis, it is imperative that you and your colleagues show initiative in paying overdue taxes so that you can satisfy your responsibilities.
First Steps towards Financial Freedom: Contacting a Tax Specialist
Working with an accountant is one of the best first steps that you can take in terms of making an IRS payment plan. These tax specialists, especially when backed by a larger company that has earned the trust of their clients and can demonstrate their successes within a wide-ranging business portfolio, have helped companies repay thousands of dollars to the IRS while minimizing their amount due. By working closely with your team, this specialist can help your company to minimize your interest and additional fees by drafting a plan that is feasible and realistic, based upon your company’s resources of time and money. They will also be able to recognize any opportunities that your company can take advantage of in order to request extensions or fee reductions, which in turn will help you settle your IRS debt case fast.
Loans and Installment Plans: What’s Best for Your Company?
Many tax advisors will recommend that you look for low-interest opportunities to take out a lump-sum loan to pay the IRS immediately, reducing your chances of increased interest rates and fees. Furthermore, solving your tax problems early can show the IRS that you are diligent about solving your tax issues, and will remove any additional liabilities from your case such as the chance of losing your home, facing personal loss, or receiving other financial threats from the government. However, if a loan is not possible for your company based upon credit issues, or your tax advisor suggests that the loan will not be possible in the amount you need, you can establish an installment plan with the IRS that locks you and your company into a repayment plan over a period of time, up to three years. Lastly, you might want to look into negotiation of an Offer of Compromise, which will allow you to settle with the IRS by paying an amount in taxes smaller than what is currently due in a timely fashion.