The Internal Revenue Service (IRS) requires ALL business that have W-2 employees to deduct income taxes, unemployment taxes, social security and Medicare taxes (as well as state taxes if required) and to remit those monies with any required employer contributions to the IRS. Unemployment taxes are required yearly on Form 940, and Form 941 is required quarterly on form 941 (unless the IRS allows a business to file Form 944 yearly instead).
Are these taxes different than income tax?
The IRS and California Franchise Tax Board (CA FTB) treat these taxes very differently from income taxes. They treat it like your business stole from its employees and are very aggressive in collecting these taxes. In general, these taxes are very difficult to include in an Offer in Compromise when a business still has W-2 employees. The IRS and CA FTB will generally NOT place companies or businesses in a hardship status until they can pay. THEY WILL CLOSE YOUR BUSINESS unless you setup an Installment Agreement or pay off the payroll taxes.
I am self-employed how is the IRS going to shut me down?
The IRS will rarely close your doors themselves, they will force you to close your doors. They cannot garnish your wages – you are not a W-2 wage earner. They will instead garnish all your sources of income. The IRS and CA FTB can send out garnishments to any company or individual that does business with you. Your business’ most frequent and largest customers will get notices that any monies owed to you and your company need to be paid to the IRS or CA FTB. They can clear out your company bank accounts. Once the flow of money dries up you will have little choice but to close your business. The IRS will seize and liquidate any assets left over.
Can I keep my business running even if I am behind?
Yes, but it is IMPORTANT to get help sooner rather than later. Get a professional on your side that has extensive experience helping businesses large and small. Revenue Officers will be assigned to specifically handle your case and they can be extremely aggressive. Our experienced and knowledgeable Sacramento tax debt resolution attorneys are on your side and will stand up for your business and your rights.
Can I close my business and just open another one?
Yes, but then the IRS or CA FTB can make YOU personally liable for tax debts of the company through a Tax Fund Recovery Penalty (TFRP) action. The best course of action is to address and resolve any back taxes owed so your business can return to profitability.
Sacramento Business Tax Debt Resolution Attorneys
The experienced personal and business tax debt resolution attorneys of Bowman & Associates help clients across California from our offices in Sacramento and Folsom, CA. If you or someone you know owes money to the IRS and/or California Franchise Tax Board as a business, contact our knowledge tax debt lawyers for a free case evaluation. We can help you avoid shut down, wage garnishments and harassing phone calls.
