Payroll tax debt can potentially become an incredibly serious burden for businesses and individuals, regardless of the size. Frankly, at this point in time, avoiding IRS Penalties is extremely vital. It is very important to address the issue, before it is too late, in order to avoid any form of penalties and interest charges. Truly, any form of debt that accrues over time is frightening. The Internal Revenue Service (IRS) can actively take aggressive actions in order to collect unpaid payroll taxes, including seizing bank accounts, liens on business assets, and often immediately shutting businesses down.
Luckily, there are several options in hand that help businesses settle their payroll tax debt! This step-by-step blog will walk you through the procedures of resolving payroll tax debts, including requesting Offer in Compromise (OIC) or negotiating payment agreements. At this point, when things seem confusing, getting in touch with a professional tax consultant is very essential!
While it is possible to navigate the payroll tax debt just on your own, it is undeniable that the entire process can be very time-consuming and incredibly lengthy. Often, things encircling these can become very aggravating at times. And that is enough reason why consulting a professional is important. Why? Because things like these are easy in appearance, but daunting in reality. Taking the right steps at this point is very, very important. So, why keep waiting? Let's discuss it in detail!
1. What is the Amount Owed?
What do you owe? That is the very first thing that comes into the mind when trying to settle any amount of debt. So, take your time determining the total amount of payroll taxes owed, including any charges or penalties that have accrued over the time. This can possibly also be done reviewing the IRS notices that are sent to you or by contacting them directly. Sometimes, keep in mind that the government initiates IRS wage garnishment, wherein the portion of a taxpayer's wages are withheld in order to pay their debt off.
2. Get in Touch with the IRS
Once the amount of taxes you owe is clearly determined, get in touch with the IRS to further talk through your payment options. You can directly visit the IRS website and use relevant resources in order to get all the answers to your question, make payments, get access to your tax account information or in fact file tax returns!
You can also visit the IRS website and use their online resources to find answers to your questions, access your tax account information, and make payments or file tax returns. This may be widely necessary in case you need to provide documentation.
3. Payment Plan Set-Up
In case you're unable to pay the full amount owed upfront, you might also get to set-up a payment with the Internal Service Revenue (IRS). This can equally enable you to make monthly payments towards your tax debt over a given period of time.
Seeking a payment plan is a very common way to settle payroll tax debt. In case you owe payroll taxes, the Internal Revenue Service might as well create a payment plan which fits your budget and aids in gradually paying the debt off. This is just a common, and necessary way to avoid IRS Penalties.
In order to set up a payment plan, contact the IRS and provide very detailed information about your current financial status. It can vastly include your income, expenses, and assets. It is important to communicate with the IRS and kep things very clear.
4. Negotiate an Offer in Compromise (OIC)
Are you unable to pay the full amount owed? This is exactly where you can avail an Offer in Compromise (OIC) with the IRS. This is a settlement agreement where you agree to pay an amount less than the original amount.
This option is vastly available to those unable to pay their full tax liability or if doing so would cause a major financial burden. In order to qualify for an OIC, taxpayers must have filed the tax returns, complete all forms of estimated tax payments for the current year, alongside all required federal tax deposits.
However, while an OIC application is definitely viable, not all are accepted. Thus, just make sure you go through the application prior to submission.
5. Make Payments
After you have established a final payment plan or negotiated an Offer in Compromise (OIC), it is very vital to make sure your payments are on time and typically, in full. Failure to do the same can potentially result in additional interest and penalties.
When paying the debt, make sure all the amounts are paid in full. This is because nobody would want to open the gates of additional charges, when in fact the due amount can be settled for the original, and a comparatively less sum.
6. Get Help
In case of any difficulty that comes with navigating the process of settling your payroll tax debt, it may be incredibly beneficial to get in touch with a tax professional who can give you the guidance you need throughout the procedure.
It is very important to address payroll tax as early as possible in order to avoid accruing additional penalties and charges. By following these steps and seeking help when necessary, you can settle all your payroll taxes and get your finances back on track.
Dealing with payroll tax debt can be sophisticated and scary for absolutely any business or individual. To be frank, ignoring the problem will only cause it to become worse. Working with experts that can help you navigate through the procedure and find a solution that works for you is very important.
It is massively imperative to remember that dealing with the IRS can often be intimidating but it is not something you need to do on your own. Seeking the help of a professional can give you both peace of mind, and a clear path to resolving it sooner than later. Need help? Consult a professional tax consultant now!