Tax Relief: Get Rid of Pride before You Fall
Posted by LWM Team on Thu, May 27, 2010
Even the best entrepreneurs need to see past their pride in order to understand how risky it is to function in a climate of tax trouble. The IRS shows no mercy to such businesses and they also incriminate business owners and management. There are indications that all is not well regarding tax issues in a business.
Every business owner and self-employed individual is responsible for filing and paying their income taxes. Even though workers possess a means for keeping back tax money; business owners mostly do not. A shortage of cash from the business negatively influences the capacity to pay living costs that are personal. The consequence is that essentials like mortgage interest and groceries get paid and the IRS does not. This delay means the IRS has the right to petition your home. There is no use in paying your mortgage if you leave it vulnerable to seizure because you don't make quarterly tax payments.
A business may not use retirement cash to take care of personal living expenses. Creditors who are paid with this money have no right to it. Retirement cash is regarded as an asset and is beyond the grasp of creditors with the exception of the IRS.
Prior to a business dipping into retirement cash the credit cards are used up. By now the business is already in trouble due to credit card debt that is out of control. Refrain from taking retirement cash to cover the cards. In fact, paying the IRS is more essential than paying the cards. If need be, bankruptcy will remove credit card debt. The IRS will not overlook the non-payment of taxes.
If a business owner uses employee tax withholding money to cover creditors the business will fall deeper and deeper into tax debt due to penalties and added interest. Both the owner and management will be held liable for taxes that are not paid. The IRS will attempt to get tax money from the owner's and management's private assets.
A business that can't make tax payments must still file. If you don't, you are delaying the inevitable. The IRS has a tracking method for returns not filed particularly in the case of employment tax. Non-filing will get the interest of the IRS and a designated Revenue Officer. It is preferable to truthfully keep the IRS informed of the troubles your business experiences rather than allowing pride to stop you.