There Are Many Types of Tax Liability Problems You May Encounter
There are countless reasons why so many Americans have problems paying their taxes: illness, crime, or a life-altering incident can eat up income delegated for the IRS, or an unforeseen business expense can affect the ability to pay your company's liabilities.
For many years, tax relief attorney Travis Watkins has helped clients throughout Oklahoma and Texas with a wide range of tax problems. These are some of the most common reasons why families and businesses face penalties for unpaid taxes.
Payroll or Employment Tax Problems
If you are a business owner, you know that meeting day-to-day expenses can be difficult when revenue is not being generated. If the business is having a slow month or year when it comes to profits, business owners may put payroll tax responsibilities on the back burner in order to keep the lights on and the door to the store open.
In today's struggling economy, this is certainly not uncommon.
But, Uncle Sam refuses to wait. Unfortunately, unpaid employment taxes can result in a levy or the legal seizure of your property to satisfy unpaid debt. What many American business owners don't know is that the U.S. government considers unpaid payroll or employment tax a high priority debt. This means that the IRS will try to collect unpaid taxes from companies before collecting income tax from individuals, and will be more aggressive in their collection action against the business than they would for any other type of tax.
And, since the government doesn't really care whether or not your business survives, this can mean facing a major roadblock if you are trying to negotiate a long-term plan to settle the debt.
It's a business owner's responsibility to collect federal income, Social Security, and Medicare taxes from employees to pass along to the IRS. These taxes are also called trust fund taxes, which is why the IRS considers the non-payment of these taxes "theft."
The elevated charge of "theft" is also why the IRS makes it very difficult to avoid penalties. Even if you miss only one payroll tax payment and make all of the rest for the year, the IRS will continue to apply the current payments a cycle late, causing you to incur penalties, which can spiral downward into more debt if you don't have the cash flow to cover the expense.
Problems With an IRS Revenue Officer
When a person or company has a tax liability, an IRS Revenue Officer may be assigned, depending on the length of delinquency and amount of the tax debt. So while you are stressed about how to cover the cost of the unpaid taxes and looming penalties, the IRS adds to your stress by sending an agent to knock on your door and try to collect that debt.
The main goal of a Revenue Officer is to get the money back to the IRS by any means necessary.
And while Revenue Officers are expected to be courteous and professional with you at all times, they are not expected to take into account your financial situation or any personal problems that may affect your ability to pay your tax debt.
What is also nerve-wracking is the fact that Revenue Officers have the ability and the authority to garnish your wages, freeze your bank accounts, seize your property, or put a lien on your home. They are also influential in making a determination about any settlement options or negotiations you may be trying to make to settle the debt.
Since these individuals have the resources and the backing of a major governmental institution behind them, it doesn't make much sense to try and go up against a Revenue Officer on your own. Enlisting the help of a certified tax lawyer can ensure that you have someone on your side with your best interest in mind, and can ensure that the tax laws are used in your advantage. This can make all the difference in saving your business or home.
Income Tax Problems
Chances are that if you are facing a huge income tax liability, the thought of wage garnishment is truly frightening.
But, one of the most common tactics used by the IRS to gain back some of the money that is owed is to take it straight from your paycheck - many times without adequate warning, and obviously without your permission.
In addition, the IRS could put a lien on your home and other property and charge you astronomical penalty fees; it may seem like you are stuck in a hole with no way to dig yourself out.
While there are certain ways to express to the IRS how and why you are struggling with your tax debt, there is no guarantee that the IRS will take your hardship into consideration.
State Tax Problems
While Texas does not have a state income tax, Oklahoma and Arkansas do. If a state tax collections entity has contacted you about unpaid income tax—or sales tax if you're a business owner—contact us today for relief.
They will tell you that you don't need a lawyer to negotiate for you. They claim they will "help you". Don't be fooled. These collections agents view business owners as trustees of state revenues. If you owe sales tax, the state considers you a common theif, and will treat you accordingly!
The reality is, if you can't pay back the sales taxes you were supposed to be holding in trust quickly (usually within a year), your business is going away. Problem is, these fiduciary taxes will stay with you personally even after the business is long gone.
Fixing the Problem
The good news is that there are solutions for settling tax debt available to you. Depending on your situation, you may be able to file an Offer in Compromise, claim that you are an Innocent Spouse or Currently Not Collectable, or obtain a Penalty Abatement or Installment Agreement.
But it is important to note that regardless of which type of solution you are trying to seek, the IRS will require many documents to prove your claim and investigate your financial history and income status.
This can be very daunting, especially when your home, business, or paycheck is on the line. That is why you need to have an experienced tax attorney on your side to help you face the IRS and its Revenue Officers. Travis Watkins can provide you with a free copy of his book, The Ultimate Survival Guide for IRS Problems, and offer you a free consultation when you call him at 800.721.7054. Don't pay more money than you have to: call today.