How To Handle Back Taxes: What You Need to Knoц

A central reason behind America’s founding was a basic principle: “No taxation without representation.” It turns out that taxes have always been a thorn in the American people’s side.

The trend continues today. According to recent IRS information, Americans owed $120 billion in back taxes, interest, and penalties in 2022. This problem affects businesses and private individuals alike.

Back taxes can lead to crippling consequences for businesses small and large alike. Dealing with this issue often feels impossible, but there is hope. Read on to discover everything you need to know about dealing with these tax issues!

What Back Taxes Can Do to a Business

Back taxes can result in several tax issues for companies that don’t pay on time. Some examples include:

• Interest and penalties accruing
• Forfeiting your tax refund
• Property foreclosure
• Possible jail time.

The most likely issue your company could face is interest and additional penalties. When your taxes remain overdue, the IRS can assess a minimum penalty of $205 on your business. The maximum penalty it can impose is 25% of the owed amount in addition to interest.

That may sound like the worst-case scenario, but that’s just the penalty for filing taxes late. Paying your taxes late can result in a penalty ranging from 0.5% to as much as 25% of your unpaid taxes. This debt can quickly cause devastating consequences for your business.

Another critical issue your company could face is property foreclosure. When your taxes become overdue, the IRS will send a notice to your company. If you fail to submit a timely payment, the IRS will file a business tax lien on your property.

The IRS can use this lien to seize your business assets if you don’t pay. They could even take your personal assets if your small business remains unincorporated!

Can You Handle Back Taxes Alone?

When you owe money to the IRS, it may seem best to handle the issue in-house to save money. However, many small businesses lack the necessary accountants and staff for this task. For this reason, it’s often best to hire professionals and have representation in this matter and obtain best outcomes of tax resolution.

Generally, there are two types of professionals to assist with back taxes. The first is a tax attorney. Tax attorneys understand all the legal complexities of IRS dealings and can help you navigate these challenges.

Second, there are tax-specialized CPAs. These professionals are qualified accountants who specialize in tax-related issues. They can negotiate the best option fitting your facts and circumstances – be it Offer in Compromise, Installment Agreement, Partial Installment Agreement or Currently Not Collectible.

Resolving back tax issues becomes simplified when you have certified professionals on your side. Consider hiring these professionals as soon as possible to find solutions to your tax problems.

How We Can Help

Many business owners worry that hiring lawyers and CPAs can add more burdens to their company besides their back taxes. After all, paying two firms can quickly become costly for companies.

Fortunately, that’s where Achieve Tax Relief comes in! Our company provides a tax attorney and a tax-specialized CPA to assist your company with its financial problems. Contact us today to schedule a consultation!