There is no escaping the wrath of the IRS when it comes to unpaid taxes. There are several differences between running a small business versus a large corporation, but at the end of the day, payroll taxes are something that all business owners must pay close attention to in order to avoid problems with the IRS.
Owing the IRS is not the same as owing a lender or creditor. In the latter situation, you can often negotiate or work out payment arrangements that will allow you to avoid legal ramifications and get your accounts in order without losing your business. The IRS is not a lender nor creditor and will take aggressive action with collection efforts.
It is not unheard of for small businesses to close shop once they become the target of IRS collection efforts. To avoid this and keep your business afloat, you must manage your payroll taxes properly.
Running a small business in this economy has presented many challenges to owners and managers. With many struggling businesses fighting to keep their doors open, it is sometimes tempting to use withheld payroll taxes for other issues that present a cash flow crisis. This is not a practice that is recommended as in many cases you are unable to “repay” this borrowed money when it comes due.
If you are unable to pay your payroll taxes or are already delinquent, expect the IRS to use every weapon at their disposal to collect monies owed. Many small business owners who have made this mistake learn the hard way that using withheld payroll taxes is considered theft which can have very severe consequences. In addition to legal ramifications, the IRS can and will intercept payments from your clients to be used toward you delinquent tax bill.
As you can see, managing your payroll taxes incorrectly can have a devastating impact on the future of your small business. The best way to avoid problems with the IRS is to ensure your payroll taxes are paid accordingly. If however, you are already delinquent in paying your payroll taxes, it is imperative you address the issue immediately to mitigate further damage. Do not avoid the IRS as this will only encourage more aggressive collection actions.
Small business owners rely on their business for their livelihood, making it important to contact a tax professional who can help guide you through the process of dealing with the IRS. At the end of the day, no one else is worried about the future of your business, so take the appropriate actions needed to remedy the problem and avoid it moving forward.
About The Guest Author: Trisha Wagner is a frequent contributor to a site designed to help with tax debt. If you are in need of IRS debt help, this site can help you figure out what your options are to remedy your tax problems.