If you’ve just found out your small business owes substantial taxes to the Internal Revenue Service (IRS), it’s time to start planning for how to handle your tax liability immediately. Failing to do so could lead to even greater penalties and interest as well as the IRS putting a lien on your assets, seizing cash in your bank accounts and other actions that could threaten your business’s survival. You could even face criminal sanctions for tax evasion.
Here are some of the most common mistakes to avoid when handling your IRS tax bill:
- Letting the problem fester. By ignoring the issue, you’re only creating more issues for yourself as the IRS won’t just go away. The faster you deal with the situation, the better off your business will be in the long run.
- Taking the IRS’s word for it. Even the IRS can be wrong. Simply accepting its conclusions on the amount of taxes you owe, without verifying or challenging them, could mean you end up owing a lot more than you should.
- Not considering a payment plan or an “offer in compromise.” Just because you owe a lot of money doesn’t mean you have to pay it all at once—or even pay all of it. The IRS may be willing to work with you on establishing a payment plan over several years or it may accept an “offer in compromise,” through which you will pay less than the total amount due.
- Not hiring professional tax assistance. Filed under “last but certainly not least,” not reaching out and getting professional advice when facing large IRS bills is probably the biggest mistake any small business owner can make when they owe on federal taxes. An experienced tax professional can verify the amount you owe and work with the IRS for you to make sure you arrive at the best solution for your business regarding repayment.
Does your small business owe money to the IRS? Call us or send a message to discuss your options today.