Atlanta-area small business owners understand the pinch that can come from having to pay employment or payroll taxes. A downturn in business or a financial emergency can affect your bottom line in a hurry, making it seem less crucial to send in regular payments to the government.
The IRS can be slow to respond to businesses that are delinquent with employment taxes. However, it’s not a good strategy to wait until the IRS contacts you before you get your financial house in order.
For one thing, the agency can take aggressive action against you, including levying your bank accounts, issuing tax liens against the business and even threatening to shut it down entirely. And the longer you attempt to put off dealing with the problem, the worse the situation can become when it finally comes to a breaking point.
Up to now, the IRS generally would not contact a business that was behind in its payments until that business filed an employment return that showed it was behind. At that point, the money owed might be so great that the IRS would take actions such as those mentioned above.
It may have been better, in many of these cases, for businesses to seek help from a tax attorney before interacting with the IRS, rather than after. A new initiative from the IRS could force employers’ hands even earlier, however.
The agency announced recently that its Early Interaction Initiative would aim to get in touch with employment tax-owing businesses on an accelerated timeline, sending letters and calling businesses — and, in some cases, appearing in person — to try to achieve compliance.
This makes it more important than ever for businesses to take stock of their employment and payroll tax situation, and contact an experienced tax attorney in order to better manage the situation.
Source: Internal Revenue Service, “New Early Interaction Initiative Will Help Employers Stay Current with Their Payroll Taxes,” irs.gov, Dec. 8, 2015