Eliminate the tax debt on you small business. If your small business has tax debt, then you will have to face the oppressive power of the IRS and the other methods that agency may use for collecting the taxes which are overdue. Amongst these, many of them may be the reason for ending your business.
Most of the small businesses that have fallen behind in the taxes can find a solution in working with IRS. However, they should know the pros and cons of managing it. So, if you need to pay to the IRS, read on to know what you should keep in mind.
Who To Contact?
Contact the Internal Revenue Service – Have you fallen behind in making the tax payments? Do you still want to continue your business? If yes, then you should not forget to contact the IRS. Although the agency may keep you alone for sometime, you may get in touch with the IRS at the most suitable time. Try to avoid the Internal Revenue Service since its outcome may be severe such as paying the penalties and rise in the rate of interest. This can even lead you to lose the small business you’ve built.
IRS Collection Methods
Collecting power of the Internal Revenue Service – The IRS has the power for collecting the previous taxes that are still due. The IRS may take away your personal bank account, your salary and property. Besides this, the IRS do not need to get an order from the court for ending your business and seizing your house. Usually, the IRS needs to send you a form known as demand letter in most of the cases before it may take any step against you. There are also certain special situations when the IRS is forced to give you a warning before it may take any action against you.
The rate of interest and penalties – The more you are going to avoid the tax problems of your business, the large it will become with time. At present, the tax debt blend at around 14%. If you are not involved in the business or you do not have a job, the tax collectors of the IRS will be hurrying for their payments.
Ask For a Settlement
Request for Offer in Compromise – You may plan out a deal with the IRS for settling the tax bill with the help of Offer in Compromise. It a long process to request for Offer in Compromise and you will have to complete the IRS form and give the complete information about indecisive financial condition. You will have to request the IRS for accepting only a certain part of the debt you need to pay for your business.
Sharing Your Financials
Give financial details to the IRS – You will have to cooperate with the IRS and give the financial details that the collector may enquire for. However, it s not at all good to have a complete confession. You should not tell any lie to the IRS, however you do not need to declare anything related to your assets or finances to your debt collector till you’re asked for something.
Eliminate The Tax Debt
You can settle your tax debt with the help of settlement companies. Apart from these, if you want you may file for bankruptcy since this will enable you to eliminate at least some of your tax debts. However, bankruptcy should be your last option when you find no other way out.
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