Earning revenue commonly requires the payment of taxes. Thriving business owners may not have a problem paying taxes on a highly-profitable company. Those struggling financially, however, might find themselves in a tough bind.
Funds become so short they cannot cover their business taxes. Federal and local tax collectors still want payment on obligations owed. What can a business owner do when he/she can’t pay the taxes?
Don’t Choose Not to Pay
First, let’s mention what not to do: don’t decide to flat out not pay. Some even choose to not file tax returns with the hope no one will notice. The tax agencies may not notice right away, but they eventually do discover who owes them money. In addition to owing the original tax amount, penalties and interest pile on top of the original debt.
Depending on the amount of money and the type of taxes owed, failure to pay and file a return might lead to criminal charges. The charges could even rise to the level of felonies. So, choosing to ignore tax responsibilities remains a bad idea.
File Tax Returns without Payment
Even if you cannot pay the tax amount owed, file all required tax returns. Failure to file a tax return not only comes with penalties, it can be charged as a crime on the federal level and in certain state jurisdictions. If you file a return, owe money and haven’t paid, a bill shall be forthcoming.
Once the “tax due notice” arrives in the mail, you can then take the necessary steps to address the obligation. Maybe taking out a Goose Creek auto title loan could cover all or part of the debt. Owing a private lender might turn out to be less stressful than owing the IRS.
Contact the Agencies
When you owe taxes and are not able to pay, keep the agencies informed of the situation. Doing so would be far wiser than flat out ignoring obligations. By informing the tax agencies via a phone call and/or in writing, you display a clear decision to be responsible for the debts you owe.
Truth be told, a lot of people can’t pay their taxes. The IRS understands this and has an official program in place to extend the due date of a balance owed. You also have the option to request a formal payment arrangement. In cases where a person or business entity seriously lacks assets, an “offer in compromise” may be filed to settle a debt.
Contact an Accountant
When you owe money or haven’t filed in some time, the situation could require the assistance of a professional to straighten out. A certified public accountant may be quite helpful for those owing money or haven’t filed any tax returns. In dire tax situations, retaining the services of a tax attorney might be necessary.
Take Steps Today
Whether you need to hire an accountant, respond to an inquiry, or take out a loan, take necessary steps today. Delays rarely help a tax trouble situation. Move quickly to address the debt to avoid any further problems.