If you owe 941 payroll taxes and a tax lien is filed, you'll being hearing from...

In the nearly 30 years that our company, Washington Tax Services, has been around, we get many calls from businesses that owe 941 payroll taxes. These clients often get into touch with us via our other Blog which has posted frequently about 941 tax resolution and particularly about the "cold calling of tax liens" phenomenon.

AS anyone who owes 941 taxes knows, the filing of a tax lien will prompt phone calls from telemarketers based largely in Colorado. While the legality of the calls is questionable as the following blog post makes clearly: Cold Calling Tax Liens Legal? - just as importantly, what do these tax relief companies charge? Let's illustrate this thru a recent case example.

At the end of September 2016, we heard from a consultancy in Virginia that owed about $100,000 in unpaid 941 payroll taxes.  This debt was large enough to trigger a tax lien and calls from cold calling tax relief firms.

1. One company, a reputable one in Oregon, charged $10,000 to represent them.

2. Another firm in Southern California, offered to take on her case for a $20,000 fee.

3. We took on the case for $2750.00 - start to finish.

What kind of outcome would this client expect?

Well $50,000 of her debt was for 940 taxes (annual taxes) - returns the IRS had filed for her.  These were easy to fix. Replacing the returns the IRS filed for them - should reduce these to about $5,000.

Finally the other $50,000 in quarterly 941's looked fairly easy to deal with as well. This customer was looking to dissolve her business. We would direct the IRS to focus on the "Trust Fund" amount of the taxes (40% of the debt) - bringing the debt down to about $20,000 - this is possible when a business is looking to close.

So...client should see their debt go from $100k to $25k with our help. We thought $2750 was an appropriate value for our time. We even explained to the client our strategy up-front. The other firms were vague and just pressed the fear buttons in the client to get their bigger fees.

Have a 941 tax issue? Want a second opinion and less expensive option? Call Washington Tax Services now at 1-888-282-4697 or EMAIL us an explanation of your tax issue HERE and we'll contact you.  

The 3-Year Personal Assessment Rule on 941 Taxes, Case Example

AS we wrote a few posts back, if you have a Corporation, Multiple Member LLC or Partnership and you owe 941 taxes, you can avoid personal assessment of these taxes against you if you can run out a three year clock. A recent case of ours illustrates how one individual avoided being assessed the trust fund taxes on about $250,000 in 941 taxes.

This individual in Minnesota contacted us originally in February of 2012. This client was audited on his 941's and we represented him on that case. Once the business was assessed 941 taxes, we told the customer that if he was very lucky maybe the three year clock would pass and he wouldn't be personally assessed (!).

When he contacted us again in the fall of 2015, we were glad to report that the Statute to collect the 941 tax against him had expired. The IRS agent assigned to his case conceded so. The client just paid off his most current taxes, dissolved his company, and essentially walked away from a quarter million dollars in payroll tax.

Not everyone will get this lucky. But if you do owe old 941 back taxes, it is an important consideration if you are one of the entities above (Sole props are the exception to this rule).

Washington Tax Services is approaching its 30th year of assisting tax problem clients. Call us at 1-888-282-4697 to discuss your 941 tax or other tax issue or EMAIL us a description of your tax issue HERE and we'll contact you.