Typically, it is only after they receive an IRS notice, the company tax issue appears unmanageable, or they learn about a pending collection case. Unfortunaltely, when a tax matter goes unaddressed, they rarely remain stable.
What may start out as a simple late filing, a payroll tax liability, or a standard tax audit quickly becomes complicated when penalties and interest accrue and your assets begin at risk through wage garnishments and tax liens, or even criminal charges for tax fraud. Consulting a sales tax audit lawyer at the right time can prevent these situations from escalating further.
Often business owners find themselves so concerned about keeping their operations running and individual owners so apprehensive of the sheer dollar amount of the taxes they owe, that they decide not to do anything about the matter in the hope that it just goes away. That seldom happens though. Indeed, as we will see, procrastination often leads to more complex, expensive tax resolutions. Let us take a moment to explore common forms of tax problems and when it is appropriate to seek professional help.
Why Businesses Are Surprised by Payroll Tax Issues
A payroll tax issue generally arises with the ebb and flow of a businesses life cycle.
During an economic down cycle, cash flow issues will cause owners to take a difficult look at where they want to allot money. Oftentimes rent and inventory can be obtained on a payment basis whereas the payroll may represent the largest single expense to the business for the period. Even if an owner is faced with this dilemma the payroll is to be paid to the government and in fact, the payroll taxes are what should come to mind first and foremost since you are holding, at least temporarily,, employees payroll taxes. A sales tax audit attorney can also help businesses stay compliant with both payroll and sales tax obligations simultaneously.
The government considers that money to beheld in trust by you the owner of the company, and they have some special powers when it comes to collection of payroll tax as a result. A payroll tax debt may go unnoticed, or just become a small amount, a little at a time but quickly grows to an enormous figure resulting in investigations by the IRS on both you and the company, and penalties and interest for an unpaid portion of the Payroll.
The IRS Does not Treat Payroll Tax as Another Tax
The common mistake many taxpayer's will make is to assume that payroll tax has been placed the same on their own tax like any other business tax owed.
This is far from reality.
The IRS dedicates significant assets and resources to the collection of payroll taxes. As payroll tax grows without an appropriate action being taken the issue can become of the utmost significance and quickly in part the IRS may send an enforcement officer to business. An IRS lawyer NYC can step in at this stage to help negotiate and prevent further enforcement actions.
Common consequences may include:
- Federal tax liens
- Wage garnishments
- Bank levies
- Trust Fund Recovery Penalty investigations
Personal Liability in Payroll and Sales Tax Matters
That fact that owners or others in control could be personally assessed taxes under circumstances in many payroll tax matters could be one of the most devastating elements. That alone could justify the prompt payment or addressing of Payroll tax liabilities. Sales tax audits are another significant way business owners can be subject to significant personal exposure and have to bring in a business owner if tax has not properly been addressed by a business entity. Working with IRS wage garnishment attorneys early can help protect personal assets before enforcement actions are initiated.
Many owners have been shocked by personal assessment and the significant tax and the taxes due after the audit has been complete and reviewed over previous years including looking into their records for exemptions. When they were in business, they thought that all the required tax obligations would continue on but then they have had to deal with them if not handled right from the beginning and the long arm of state tax collection.
When Does a Limited Audit Become a Full-Scale IRS Investigation?
When does an audit go from one that was intended to be very limited to a far-reaching, expansive IRS tax audit that now looks at many aspects of business operation and income tax? An audit does not have to be viewed as fatal or something that is going to result in a high tax bill. However many times this type of IRS investigation can turn into many more. It can become invasive where an IRS examination will broaden and ask for much more documentation. Where one thought that an IRS audit had some kind of limitations the IRS Auditor will bring new and additional issues into focus and you've got to realize that many things have to be brought into compliance quickly. A payroll tax fraud lawyer can help you respond effectively when an audit begins to expand beyond its original scope.
When Tax Issues Become Criminal
The IRS considers taxes to be serious but, generally, tax issues result in civil collection. Some tax authorities think that tax matters are intended and criminal. Unreporting of Income, or claiming false exemptions or deductions, or altering financial records or even tax falsification or criminal intent will surely make a criminal tax charge very feasible for a business owner who is trying to cheat tax laws. If this ever occurs it has significant consequences. It would behoove anyone who is in this situation to immediately consider acquiring the help of a tax criminal lawyer before saying something that could be incriminating or adverse.
What Happens When Tax Returns Are Not Filed on Time
In the event that a taxpayer fails to timely file tax returns the issues are many. This occurs because for one, the income is reported from various sources including employers and banks, and the IRS simply doesn't think that is fair or is able to take the income as uncollected tax. They are going to calculate tax on that reported income and will likely add penalties and interest to this without many deductions to the business owners tax. Eventually there is tax debt that becomes extremely large and problematic to bring under control if not taken care of at a relatively young stage of the process. A criminal tax lawyer can be essential when unfiled returns escalate into potentially criminal territory.
The tax liability will only snowball when the IRS starts collections. Once there has been an assessment it is likely to go from a written notification to levies on assets such as bank accounts and wages as an option for the business. Taxpayers tend not to even realize how serious the situation has become until they've already had their money taken.
Collection actions may include:
- Wage garnishments
- Bank levies
- Federal tax liens
- Asset seizures
These enforcement measures can put a lot of stress on taxpayers and make it that much harder to become solvent again. Often, these issues have more flexible solutions and resolutions once they are resolved before enforcement action has begun.
Why the Most Consistent Fact in Any Tax Matter Is Also Your Biggest Solution
Collection actions are designed to take action. These measures and collections often add to the taxpayer's expenses and, for a taxpayer with money troubles, are simply more difficult to manage than tax compliance challenges that don't involve immediate collection actions.
Taxpayers can resolve most individual and business tax collection disputes with or without professional help, such as paying the liability by installments, through a lump-sum offer in compromise with the IRS and state and local taxing authorities or by obtaining penalty abatement and payment terms that would allow you to discharge many tax debts as part of a bankruptcy. The right plan to address your collections issues largely depends on the circumstances of the individual case, however. A Thorgood Law Tax Firm attorney will guide you through that analysis as part of a well-developed collections plan that incorporates every alternative. Searching for criminal tax lawyers near me is a strong first step when you suspect your tax matter may carry criminal implications.
What Happens When Collection Action Begins
It doesn't take a tax collections specialist to tell you that a tax problem that is not addressed proactively is going to be one big step ahead of any resolution plan or that when collection action is initiated by taxing agencies, that one factor is your immediate cause for alarm. These agencies will seek to take the following actions from you or your business in order to recover their revenue due and to ensure that they are treated as a secured party with a creditor priority: wage garnishment; levies on bank accounts; liens on your business or personal assets; seizing of property and business's most valuable asset for seizure; as well as many other more extreme collection remedies; some of which can include the suspension of your driver's license. A New York City criminal tax attorney can intervene at this stage to help protect your rights and negotiate on your behalf.
How Thorgood Law Tax Firm Can Help
However, when an issue is handled by the Thorgood Law Tax Firm before it reaches this point, you will be given the full and undivided attention you require. The firm will provide an attorney-driven tax problem-solving experience to give you the utmost peace of mind. It gives them the leverage to negotiate, not only a realistic plan, but a reasonable time for payment for a tax liability in exchange for you bringing your tax issues up to date by resolving any previously unfiled returns as well. Since 1998 the Thorgood Law Tax Firm has helped individuals and small businesses work through numerous federal and NYS tax matters. In fact, no matter what sort of tax problem you are facing – Whether the problem be sales tax and/or payroll tax violations in NYS, as well as, the other federal and NYS tax related matters - the firm provides a unique attorney-driven process to tax problem solving so you, as the client, and even your employees will enjoy a better future together. Whether you need the Best Payroll Tax Lawyer New York or a criminal tax defense specialist, the firm is equipped to handle it all.
Frequently Asked Questions
1. What issues would require you to seek a tax lawyer for an IRS problem?
Some common issues on which a tax lawyer can help a person: IRS audits, IRS collections, payroll tax problems and potential fraud charges, IRS and/or IRS Criminal Tax Charges. IRS Tax Attorneys will assist clients in asserting legal positions in any of these.
2. Will I be responsible for unpaid Payroll tax debt personally?
A taxpayer may be responsible for paying unpaid tax and interest associated with any business tax or payroll tax trust fund amount depending upon various factors. Payroll tax obligations may attach to individuals as well as their respective companies and businesses. A payroll tax lawyer New York can help determine your personal exposure and advise accordingly.
3. Can the IRS send us a notice for the audit or will the person from IRS just show up?
The IRS typically sends an audit notice before conducting any examination. If a taxpayer fails to respond or provide relevant documents, the IRS may calculate tax owed based on available information.
4. Are Un-Filed Taxes a great cause to worry about from the IRS?
Generally, tax attorneys discourage delaying to file a tax return without seeking relief. IRS substitute assessments, penalties, interest, wage garnishments and levies can easily be compounded or inflated.
Conclusion
The Solution to most tax problems is Early Intervention and proactive steps. If it is an IRS audit, un filed IRS Forms, Payroll taxes, IRS garnishment and IRS levies, or it involves potentially serious criminal and IRS taxation, It will almost always benefit the tax debtor to hire a law professional in that field; that would typically be IRS attorneys specializing in IRS Debt collection and IRS relief. The key to a successful resolution of these IRS tax issues lies not just in knowing when to take action but as well knowing who is in charge, what to do, what not to do, what to say, and who you are dealing with.
