Common Tax Obstacles Faced By Businesses
In this article, you can discover:
- The most common complex tax issues that businesses encounter.
- Top questions from referral counsel on business tax issues.
- How to navigate state and local tax law compliance.
What Are Some Of The Most Common Complex Tax Issues Businesses Encounter?
Businesses often face complex tax issues that require careful attention and resolution.
Here are some common tax challenges businesses encounter:
- Tax compliance and balances: Businesses may struggle with tax compliance, including issues related to balances for forms such as 941, 940, 1120, and 1120S. These balances can become problematic when dealing with IRS or state collections.
- Tax liens: Identification, subordination, or obtaining a Certificate of Discharge for tax liens can be a complex process that businesses may need assistance with.
- Financial and forensic audit requirements: Businesses may face financial and forensic audit requirements, which demand specialized knowledge and expertise to ensure compliance.
- Errant assessments and incorrect records: Issues such as errant assessments, IRS substitute filings, or incorrect 1099 or W2 records can lead to tax complications that need to be addressed properly.
- Trust fund assessments: Unaddressed payroll tax balances may result in trust fund assessments against officers or board members, creating legal and financial challenges for the business.
- CARES Act provisions: Questions may arise regarding the Employee Retention Credit (ERC) and Paycheck Protection Program (PPP) in connection with the CARES Act provisions, requiring guidance and support.
- Expert witness testimony: In certain cases, expert witness reports and testimony may be necessary to address nuanced tax issues in contracts or disputes, including divorce proceedings.
- Financial planning for entity creation: To protect against previous tax exposure or prevent future tax issues, financial planning is essential during entity creation.
What Are The Most Common Questions You Get From CPAs, CFOs, COOs, And Other Referral Counsel Regarding Complex Business Tax Issues?
CPAs, CFOs, COOs, and other referral counsel often seek guidance on complex business tax issues.
Here are some of the most common questions referral counsel ask us:
- How can we prevent levies, seizure, or garnishment against a business due to significant tax liabilities? What strategies can we employ when dealing with Revenue Officers assigned by the IRS?
- How should we properly address IRS tax liens in connection with lending or the sale of an asset? What are the processes and requirements involved?
- What steps can be taken to address trust fund assessments related to 941 withholding liabilities against officers or board members?
- What is the process for filing appeals to prevent collections actions or postpone them to devise effective strategies while maintaining business operations?
- What are the implications and penalties associated with 280E audits in the cannabis industry?
- How can your firm help companies, their CPAs, and their management heads comply with a variety of state and local tax laws?
Our firm offers comprehensive assistance to help companies, CPAs, and management heads comply with a variety of state and local tax laws.
Here’s how we can support you to address many of your concerns:
- Guidance and research: We thoroughly review specific situations and fact patterns, conducting in-depth research to provide accurate legal guidance before taking any action. This helps in addressing issues, including audits and assessments, and ensures compliance with tax laws.
- Appeals and balances: We assist in filing appeals to challenge erroneous audits or assessments, and we work on resolving valid balances to minimize their impact on the company. Our goal is to streamline the resolution process and reduce the associated burden.
- Government tax credits and incentives: While we do not provide advice on accounting options, we can assist with audits and assessments related to tax credits such as the ERC and PPP. This ensures compliance with relevant laws and regulations and maximizes benefits for businesses.
What Are The Tax Implications Of Restructuring Corporate Operations? How Can We Restructure To Minimize Tax Liability?
If your company is planning to restructure its operations, it’s crucial to consider the tax implications. Our firm can provide guidance on structuring the restructuring process to minimize tax liability.
Here’s how we can assist:
- Strategic entity restructuring: For businesses that have encountered IRS issues in the past, we can help create new entities that mitigate the risk of recurring tax problems. We establish proper bookkeeping and paperwork processes to prevent future tax issues for business owners.
- Entity classifications: We offer advice on transitioning between entity classifications, such as moving from an LLC to 1120 or from a sole proprietorship to a corporation. By analyzing the implications of these changes, we can identify potential tax savings opportunities.
By carefully considering the tax implications and implementing appropriate strategies, our goal is to minimize your company’s tax liability while ensuring compliance with applicable laws and regulations.