941 Tax Lien - Telemarketing Calls to Businesses -- Getting out of Control!

We have spoken to numerous clients with 941 tax issues who are getting bombarded by telemarketers to the tune of 20 calls a day! This is outrageous and frankly: probably ILLEGAL. It seems to be an area that the IRS - Office of Professional of Responsibility is NOT enforcing right now. But one would hope that they would lay the law against those telemarketers that harass businesses.

According to some of the business owner's we talk to - the telemarketers are unscrupulous -- they act AS IF they were the IRS. In a stern voice - a telemarketer says " You need to call us now about your tax lien!" It is getting worse as more "tax resolution" companies try this technique of cold calling.

Regarding phone calls to the public, the IRS clearly states in Publication 470:  http://www.irs.gov/pub/irs-utl/pub_470.46538a82.pdf that

.01 An unenrolled preparer (OR TELEMARKETER) shall NOT make, directly or indirectly, an UNINVITED solicitation of employment, except as noted below, in matters related to the IRS.  Solicitation includes, but is not limited to, in-person contacts, TELEPHONE COMMUNICATIONS, and personal mailings directed to the specific circumstances unique to the recipient.  This restriction does not apply to (1) seeking new business from an existing or former client in a related matter or (2) Solicitation by mailings, the contents of which are designed for the general public. 

To business owners out there: sorry about the abusive calls.  Maybe the IRS will do something about it? Want an honest analysis of your 941 tax issue or other tax problem, call us at 1-888-282-4697 or EMAIL us a description of your tax problem HERE and we'll call you! 

New IRS Offer in Compromise Rules: How does it Affect 941 Payroll Tax Debts?

In the last few months, the IRS has dramatically changed the way they calculate Offer in Compromise settlements on back taxes: OIC Rule Changes. How do the rule changes affect businesses with 941 tax issues? The changes could make the same difference as for individuals, but as we have illustrated in posts below: it depends on the kind of entity that you are:

If you are a sole proprietorship or an LLC (with debts 2008 and older), the rules could directly help you as sole prop 941 and older LLC debts are treated the same as 1040 debts. So you might very well be able to offer much less (12 months of disposable income instead of 48 months).

However, if you are incorporated (S corp or C corp) or a multiple member LLC (with 941 debts after January 2009 )- the Offer in Compromise is still a difficult proposition. The IRS generally wants you to pay the Trust fund portion of your 941 debt in an Offer -- so the new calculation doesn't alter that. The Trust fund portion of your 941 debt is about 40 to 50% of your 941 liability. So if you want to keep your entity open and make an Offer, your Offer is usually going to be the trust fund amount.

Owe 941 taxes? Want to see if an Offer in Compromise might work? Call us at 1-888-282-4697 or EMAIL us a description of your 941 tax problem HERE and we'll contact you!

Bank Account Levied by IRS? New Legislation Hopes to Make Levies Easier to Release

Have you ever been levied just when you were about to pay your payroll? Pretty horrifiying. Here at Washington Tax Services we feel your pain and know exactly what to do to help you get those monies recovered so you can pay your hard working staff. There's also some pending legislation to make bank levies easier to release:  http://www.accountingtoday.com/news/Legislation-Relieve-Tax-Levies-Businesses-62371-1.html

Has your business received a bank levy on your desperately need capital? Call us at 1-888-282-4697 for a free analysis on your 941 tax problem or EMAIL us a description of your 941 tax issue HERE and we'll call you. Marty Griffith, tax resolution expert at Washington Tax Services.

Two Cases in One: 941 tax liability cases USUALLY include a 2nd case

If you are a Corporation or an LLC that is delinquent on 941's and have created a large enough balance to attract the attention of an IRS Revenue Officer, you will eventually be dealing with two different issues:  the 941's and the Trust Fund Tax or Form 6672.

By hiring a tax professional like Washington Tax Services, our focus is primarily on making a sure a solution is place to address the 941 taxes.  However, if your case does reach the field of the IRS, the IRS Officer will also be focusing on assessing the "Trust Fund" of the 941's against the owners, personally.

The Trust Fund tax as mentioned also in numerous posts below is that portion of the tax which includes what was actually supposed to be withheld from employee's paychecks.  By the law, the IRS can assess this portion of the 941 tax against you personally if you are an owner of a Corporation or an LLC (previously LLC were treated as sole proprietors, but the law changed in the beginning of 2009). The Trust Fund usually comprises about 55% of the 941 tax.

The good news IS if we represent you on your 941 issue and offer a livable payment agreement on the 941 taxes...we can also get the IRS to postpone any collection activity of the Trust Fund taxes (if they are assessed).


Call me at my desk for further analysis of your 941 tax issue: 1-866-525-7324, Marty Griffith, 941 tax expert, Washington Tax Services.  You can also email me at mgriffith@watax.com.

941 taxes: Statute of Limitations for Sole Proprietorships

Unlike the example below - with corporations and some LLC's - where there can be a very limited statute of limitations to collect, sole proprietorships who ring up 941 tax debts have a long statute before the taxes expire:  10 years.  They receive the same treatment as 1040 tax debts which also have 10 year statutes.

On the good side, 941 debts created by sole proprietorships are often easier to deal with and can be lumped in with 1040 debts in Offer in Compromises.


Owe 941's -- talk to a tax expert:  Marty Griffith, Washington Tax Services 1-866-525-7324

Own a Corporation with 941 tax issues? Three Year Rule to Assess Personally: Important Factor

A recent phone call from an old client of ours is a perfect illustration of the rules relating to Corporations and 941 - Payroll Taxes. Back in 2008, we filed the Power of Attorney for his business while also also guiding him what to do on what appeared to be an unpaid 941 liability totalling $300,000(!). Our guidance to him at that time was if he had no qualms with closing his corporation then there was a chance that he could run out of the clock of 3 years, i.e., the IRS might miss the 3 year statute for them to assess the taxes personally against the owners of the company.

Well, it's now 2012.Yesterday, an IRS agent called us out of the blue to pursue this debt. It is pretty clear to us that the IRS missed their chance to collect this debt. The debt appears that it will go to the grave with the corporation.

This is one of the beauties of incorporating. Nobody plans for failure, BUT if you have a high payroll type of business it is best to incorporate. If you fall behind on 941 taxes, you can potentially avoid personal assessment of the taxes and at the worst, the IRS can assess the trust fund or 45% or 50% of the taxes against you personally as long as that assessment is within a 3 year period.

If he had been a sole proprietor, chances are that the debt would have lasted 10 years on his record and would have been fully assessed against him. That's quite a financial albatross.

Have unpaid 941 taxes? Call us at 1-888-282-4697 or EMAIL us a description of your tax problem HERE and we'll contact you! Staff of Washington Tax Services.

941 Tax Problems in a Nutshell: How They Get Resolved

If your business owes 941 taxes, here are the most important questions you and a tax professional need to discuss to bring your case resolution:


1. Is the IRS actively pursuing you? 

Most 941 tax cases of balances due higher than $25,000 are going to get the attention of an IRS field officer.  You will receive a notice or business card drop-off from an actual person in your area who's job is to pursue you for the tax debt.  That person will either mail you a letter or have an actual visit to your business.  Once you hire a tax professional they will be able to take the Power of Attorney or form 2848 on your behalf --  Link to 2848 form -- and speak to the Revenue Officer going forward..  If you are assigned a Revenue Officer, a couple of options to resolve your case are going to be off the table.   If you are a corporation, you will almost certainly be assessed trust fund taxes against yourself personally.  You will not be able to avoid that assessment in most cases.  And if a Revenue Officer is assigned, you are going to have to come up with a plan to resolve the debt.


2. Do you want to keep your business open ? Is it viable?  

This question might be most important IF THE IRS HASN'T ASSIGNED ANYBODY TO YOUR CASE YET.   If your business has no chance of turning things around, it's time for you to finalize your entity and shut down.  By doing this, you might avoid personal assessment of the taxes against you...no matter what entity your business is set up as: sole proprietorship or corporation.  More on that distinction:  HERE.   Your tax professional should  help you finesse the closure of your business to minimize the damages.

On the other hand, your business might actually be viable, but it might be so buried in debt, that it's time for you to separate your trade and skills by closing the entity, BUT setting up a new entity and starting over (Do also realize that if you do set up a new entity you MUST stay current on payroll taxes.  Otherwise the IRS could pursue you criminally for "pyramiding," i.e., opening and closing businesses with unpaid 941 debts over and over. )

If you truly want to keep your business open and believe in its destiny, then you will need to negotiate either a 1. PAYMENT PLAN 2. UNCOLLECTIBLE STATUS OR 3. OFFER IN COMPROMISE.  More on these options in another post.


If your business is delinquent on 941 taxes, call me at my desk 1-866-525-7324, Marty Griffith, Senior Consultant, Washington Tax Services or email me at mgriffith@watax.com

Who are the Telemarketers Calling on my 941 tax lien?

If your business has fallen behind on 941 taxes, the IRS may very well file a tax lien against your business.  That lien will become public record.  For several years, several "tax resolution" companies in Colorado have created a business out of representing businesses on their 941 issues.  How do they contact you?  Finding you in the public record, telemarketers will call your business and offer the assistance of their tax professionals.

The two largest 941 tax resolution companies are 2020 Financial of Broomfield, Colorado -- BBB record  and Omni Financial also of Broomfield -- BBB record.  They have spawned many other competitors in the telemarketing of lien's business -- A Mountain Time Phenomenon

Here are some issues which might have you think carefully before hiring these firms to represent you on your 941 issue: 

1. Telemarketer -- Hard Sale?  Is the telemarketer selling you too hard?  Creating urgency where there shouldn't be?  Scare tactics?  This person might have zero involvement on your case -- down the road -- so I would take their sales pitch with a grain of salt?

2. Excessive fees and continuation fees  Companies in Colorado, Omni in particular are notorious for charging excessive up front fees and large continuation fees down the road.  Be sure to read the fine print if you hire these companies.  This link we'll reveal more:  Reopening Fees Galore

3. Customer service chain and employee turnover  Many of these companies are notorious for having high employee turnover.  You really want to get the phone # of the actual licensed tax professional on staff just in case the customer service person is gone the next week.


Want direct access to your customer service person?  Want an honest and affordable solution for your 941 tax issue?  Call me at my desk, Marty Griffith, Senior Tax Consultant, Washington Tax, www.watax.com, 866 525 7324

If you owe 941's, The First Question is: What Kind of Entity is your Business?

At Washington Tax Services, one of the first questions we ask our 941 tax issue clients is:  what kind of entity is your business set up as - Corporation, Sole Prop, LLC?  The reason we ask this question is that different entities have different assessment rules -- should the liability go against you personally.


Let's look at the entities.  If you owe 941 payroll taxes and are a:

1. Sole Proprietorship -- The 941 taxes could go 100% against your Social Security Number. There is no reduction what is owed.  The key, though, is whether the IRS WILL MAKE the assessment against you?  If they do, they will treat these 941 sole prop taxes as if they were 1040 taxes that you owed personally.

2. S or C Corporation or Partnership -- If you are an officer of a S-corporation, the IRS can assess the taxes against you personally to the tune of about 45 to 55%.  This assessment is called the assessment of trust fund taxes or the civil penalties.  That is quite a discount.  And, of course, the IRS has to assess you -- a live body IRS person has come to out and interview you -- before this assessment can be made.

3. LLC - Sole Prop before January 2009. -- These 941 taxes are treated exactly as Sole Prop Taxes (above).  If they assess you, it is done as a 100% assessment against you personally.

4. LLC - Sole Prop After January 2009.  -- As per an IRS rule change, 941 taxes assessed after January of 2009 -- are treated just like a corporation (see above).  If the IRS assesses you, they will assess the taxes as "trust fund" with a discount around 45% to 55%.


Knowing that you could get a 45% discount or be assessed the full 100% is an important distinction when evaluating a 941 tax problem -- that's why we ask your businesses' entity, FIRST! 


Has your business fallen behind on 941 taxes, call me directly at 1-866-525-7324 and we can discuss what's the appropriate resolution of your situation, Marty Griffith, Washington Tax Services.  Feel free to email me also at mgriffith@watax.com

Mission Statement of the 941 issue blog

As a staff member of Washington Tax Services, I created the 941 Tax Problem Blog to be a thorough one-stop resource for people who are having 941 tax issues. Our intention is for the blog to answer questions like:

1. How do I resolve unpaid 941 taxes?

2. What is the purpose of 941 payroll taxes?

3. Can 941 taxes be assessed against me personally?

4. What is the marketplace for 941 tax resolution? What professionals are available to resolve -- 941 issues?

5. Is professional help necessary -- can I use this blog to answer my questions and to assist me at resolving my own 941 issue?

6, I received a tax lien against my company. Why am I getting calls from telemarketers? Who are they? Are they legit? 

In summary, stay tuned to continuous entries on the subject of 941 payroll taxes. We hope to make you better informed on the subject matter.

If you have any questions, please contact me at desk: 1-866-525-7324, Marty Griffith, Senior Tax Consultant, Washington Tax Services or email us a description of your tax problem HERE and we'll contact you.