Sunday, February 19, 2012

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 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

Monday, February 13, 2012

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,, 866 525 7324

Monday, February 6, 2012

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

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.