Business Tax Filing Tips

Business tax filing tips. Read about guidelines and tips for filing taxes for your business. All businesses have ups and downs; when they are up, they are making a lot of money. They don't plan for the down...

All businesses have ups and downs; when they are up, they are making a lot of money. They don't plan for the down time and they spend the money and then when the down time comes they withhold payroll taxes from the employees. They don't send it in to the treasury and they all think they will catch up; but when they don't catch up, they have a problem.

It is almost never too late. The IRS does not like to do a wage levy. They really don't, and once it's in place, the individual almost has no chance of getting it withdrawn and it's difficult for us to get it withdrawn. But usually within a 3-4 week period we can get that wage levy released. They receive a series of letters when they get behind on their taxes. The first time, the IRS will send a little letter that's says "Oops! You forgot to pay your taxes, so please send them in. Then they get down towards the end of this period and they get a CP 504. A CP 504 says we are looking for your assets. Those assets can be cash, they can be mutual funds, they can be your home, they can be income, and they can be bank accounts. They are looking for those assets and they intend to levy (that means they intend to take them). About 30 days later they will get a 1058. A 1058 says they have found the assets and are going to take them. And the next thing you get is a 668, which is the notice of levy. If they levy your bank account, you will get a 668 from your bank that says this much money has been taken. If it's a wage levy, then your employer will bring that to you. In fact, I had a case just the other day where a contractor was doing work for a property management company and his wife worked for the property management company. They gave his wife a 668 that they were taking his money. So that's kind of the series of what happens.

Now there is a bunch of other communication that goes on but the IRS gives you all of these letters. They give you all of this information and if you don't respond to them, then they are going to file a federal tax link. This makes it very difficult for you to buy or sell anything and in fact I had a lady about a couple of years ago who sold her home and she had a federal tax link. The IRS showed up at the closing and took all of her equity money. The next thing they will do is they will take your checking account. I had a gentleman last week who was left with one penny in his checking account. They don't care if you bounce checks and can't pay your bills, they just take the money. Now you have to realize they have already gone through this whole series of letters and this is what happens to people when they don't respond. They ignore the IRS, they just throw it away. I talked to a guy yesterday and he said "they can't take anything of mine." I said "your wife is working, they will take her paycheck." So again it did matter, they are married. They are going to take the money and then the last thing they do is the wage levy. Now the wage levy works a little bit different for companies than it does for individuals. If you are a W2 employee, then you just walk in one day to get your paycheck and they give you a letter which is a 668 saying that they are going to take so much of your paycheck. We have one case, it has been several years ago, but the IRS showed up at a restaurant at noon and asked the people to leave; the business was closed. They took the business. Now you have to realize those are extreme cases. The IRS had tried to get that man to comply and that man has not complied himself, nor has he retained the services of a firm like ours to help him and to deal with the IRS. Now I will say, this the biggest problem in dealing with the IRS. You can't talk to anybody that knows anything these days and you have to tell your story over and over and over again. Every time you call you get someone else and so we get frustrated. My guys that deal with my cases are ex-IRS guys. I have got one guy that was a special agent for the IRS, another one was a revenue officer for the IRS for 11 years, and another lady was with the IRS for 15 years so we know how to move inside the IRS. We get frustrated because they don't return phone calls. It's a very frustrating process and very frankly, there should be no need for firms like ours. There really shouldn't be. A person should be able to walk in and resolve their problems with the IRS, but unfortunately that doesn't happen. They are a very old organization and they have a very serious problem. The tax debts continue to go up all over the United States. Their older employees are retiring and they don't have any young ones coming up that know anything about what's going on. Right now, they have fewer employees than they did this time last year. New people are not going to work for the IRS and these older guys are all retiring.

Most of my guys have accounting degrees and are CPAs. One guy has helped 2700 clients and another guy now is a CPA, he also has an MBA in finance and they are very knowledgeable with the IRS. They know exactly what the IRS is looking for because they are used to doing it. These are people who previously used their expertise to collect the taxes and now they have come over on our side of the fence to help people resolve their tax problems.

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