Negotiating An IRS Payment Plan & Protecting Your Business Interests

In this article, you can discover:Complex Installment Agreement Negotiation

  • How to negotiate payment plans for tax liabilities.
  • The process for appealing IRS collections actions.
  • How to avoid future collections actions and manage cash flow.

Can A Business Negotiate A Payment Plan With The IRS To Satisfy Its Tax Liabilities?

Businesses can negotiate a payment plan with the IRS. The terms of the plan are determined on a case-by-case basis. Our firm provides customized solutions for each client based on a comprehensive financial analysis, considering exposures and the short and long-term goals of the business regarding the tax debt.

What Is The Process For Appealing An IRS Collections Action?

Appeals can be filed for various reasons, and there are different types of appeals available. An appeal can prevent a levy if filed timely, reverse an erroneous audit or lien filing, or act as a “second bite at the apple” if an initial payment proposal is rejected.

Understanding the different types of appeals, their timing, and implications is crucial for successful IRS negotiations. CTL has extensive experience in filing appeals and providing effective representation for clients.

How Can A Business Avoid IRS Collections Actions In The Future?

Avoiding future IRS collections actions requires a case-by-case analysis based on the underlying causes of the tax liabilities. It may involve hiring a new bookkeeper or CPA to review and properly file for the business.

In more complex situations, it may necessitate implementing multiple layers of adjustments and protections, such as third-party payroll services or creating slush funds to cover balances during periods of cash flow downturn. In some cases, a complete restructuring of the entity to start fresh with clean books and revised entity status may be recommended.

What Are The Potential Legal And Financial Implications Of An IRS Collections Action Against A Business? How Can We Protect Our Interests?

IRS collections actions, such as levies and liens, can have significant legal and financial implications. Levies can result in the loss of accounts receivable and the draining of bank accounts, while liens can hinder funding opportunities and asset sales.

In serious cases, there is a possibility of criminal investigation and enforcement, although this is reserved for the most severe situations involving substantial overstatements on tax returns or multiple entities with similar tax liabilities.

Active negotiation with the IRS is essential for addressing the balances promptly and minimizing the potential consequences. Seeking legal counsel is essential to help protect business interests during these negotiations.

What Are The Potential Consequences Of Ignoring An IRS Collections Action Against A Business?

Ignoring an IRS collection action can lead to significant consequences, including liens, levies, seizure, garnishment, trust assessments, and even criminal enforcement. It is crucial to actively negotiate with the IRS to address the balances.

However, it is also possible to challenge the validity of an IRS collections action. If there is a valid basis for appealing an audit assessment or collection action, there are multiple avenues available for doing so. Our firm is well-versed in handling such challenges.

How Can My Partners And I Work With The IRS To Resolve A Business Collections Issue?

Resolving business collections issues often involves contact and negotiation with a Revenue Officer or an Appeals Officer. In lower-dollar cases, automated collections may be involved. However, we strongly recommend that business owners, officers, or partners do not engage in these negotiations without proper legal counsel.

Our experienced team can guide you through the negotiation process, ensuring that your interests are protected and the best possible outcome is achieved. Having representation is essential, as it helps navigate complex IRS procedures and safeguards your rights.

What Are The Potential Consequences Of Bankruptcy For A Business In The Context Of An IRS Collections Action?

Bankruptcy proceedings have different implications based on state laws, and we recommend consulting local bankruptcy counsel for specific guidance. However, filing for bankruptcy can have direct and significant implications for business tax balances.

Some tax liabilities can be discharged through bankruptcy, while others may remain. Proper filing can help secure collection holds during the process. Our firm provides case-by-case advice on bankruptcy strategies, analyzing the pros and cons based on individual circumstances.

How Should A Business Manage Its Cash Flow And Financial Resources To Avoid Or Address An IRS Collections Action?

Managing cash flow and financial resources to avoid or address an IRS collection action requires a thorough analysis of the business’s current practices.

For businesses operating in a “mom and pop” manner with commingled personal and business funds, significant financial adjustment and planning may be necessary. Other businesses may need adjustments in their accounting systems, such as transitioning from cash-based to accrual-based accounting.

Our team can provide tailored advice and strategies after conducting a comprehensive financial analysis to optimize cash flow management and compliance with tax laws and regulations.

For more information on Resolution Of IRS Tax Issues Faced By Businesses, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (720) 780-0501 today.

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