Learn More about Our Payroll Tax Debt Services
When you own a small business, you are required to make monthly or semi-weekly deposits to the Internal Revenue Service (IRS) to cover the federal income tax withheld from every employee. You must also deposit both your share and the employee’s share of social security withholding and Medicare taxes. Unfortunately, it’s common for small business owners to have difficulties meeting their payroll tax deposit requirements due to cash flow problems, which in turn can lead to mounting payroll tax debt.
Instead of taking on the IRS alone, let our agency’s insider experience help you. Most of our employees previously worked as IRS agents, meaning our unbeatable firsthand knowledge allows us to understand how the system works from the inside. Our Enrolled Agents can help you reach an agreement with the IRS that will not only satisfy the government, but that is also in your best interest. Read on to find out more about payroll tax debt solutions with Tax Resolution Services.
IRS Payroll Tax Forms – 940 and 941
IRS Form 941 is a quarterly form that deals with Federal Withholding, Social Security taxes (including employee AND employer liability) and also Medicare taxes (again including employee AND employer liability). Businesses must file this form quarterly. The employer portion of the liability is paid by employers directly to the federal government. For more information on IRS Form 941 click here.
IRS Form 940 deals with Federal Unemployment Taxes under FUTA. Most employers pay both a federal and state unemployment tax. For more information on IRS Form 940 click here.
Most of the payroll tax debt problems we see that impact small business owners deals with the federal withholding taxes, and relate to form 941.
How Small Business Owners End up with Delinquent Payroll Tax Debt
Refusal to pay is rarely the issue. Instead, it is a problem of having to meet other expenses to keep the business running and not having the funds to pay the IRS. Negligence on the part of the person or company responsible for managing the payroll tax deposits for a small business is another common reason that company owners find themselves thousands of dollars in debt to the IRS. What makes an already stressful situation worse is that the IRS tends to be more aggressive with small business owners with overdue payroll taxes than it is with individual taxpayers.
If you’re facing that kind of pressure right now, working with an Enrolled Agent at Tax Resolution Services (formerly Yarborough Professional IRS Debt Solutions) is a wise move. Since most of our Enrolled Agents are former IRS agents, they understand the complexities of your situation. Unlike a tax attorney or a Certified Public Accountant (CPA), who you could also hire to represent you, our Enrolled Agents understand the perspective of the IRS, as well as your own. This enables them to approach the agency confidently on your behalf. We also focus exclusively on taxpayer debt settlement, unlike CPAs or tax attorneys.
One Possible Solution to Resolve Your Payroll Tax Problems
You may be able to enter into a monthly payment plan to resolve your payroll tax problems with the IRS as long as you meet certain requirements. These include owing less than $25,000 in payroll taxes, being current on all required filings, completing the proper paperwork, and receiving approval from the IRS to begin paying your overdue taxes monthly.
Your company may qualify for an In-Business Trust Fund Express Installment Agreement if you meet these requirements. That means it won’t require financial statements and a long verification process as it does for companies that owe more money. However, the IRS does require you to authorize a direct debit from your business bank account if the amount you owe exceeds $10,000.
If your small business does not qualify for a payment plan, you must complete Form 433-B, Collection Information Statement for Businesses and contact a Field Representative with the IRS immediately. This form requires you to list all financial information for your business, including income, assets, liabilities, creditors, whether the company is party to any lawsuits, among other private details. Even after going through all that, the IRS may still not provide you with a reasonable arrangement to repay your payroll tax debt.
Why Working with a Tax Debt Relief Agency is in Your Best Interest
Even when small business owners have no problem qualifying for a repayment program, getting the IRS to agree to an affordable monthly payment is another story. Keep in mind that it wants to receive its money now, and you have forced it into the position of an unwilling lender by not meeting your tax obligations on time. The IRS also prioritizes the debt you owe to it over what you owe to other creditors.
Most people assume they have no recourse when the IRS states what it will accept for payment each month. Please understand that when facing payroll tax problems you have the right to hire a company like Yarborough to represent you, whether you have already attempted resolution or have yet to contact the IRS. And there’s no better company than us.
Not only do we bring our strong negotiating powers to the situation to arrive at a solution that allows you to repay your debt while still being able to support your family and meet other obligations, we also have many employees who have former experience working as federal agents. Contact us today for a free consultation regarding your payroll tax debt, and let us help you toward a debt-free life.