Welcome to the 941 Tax Problem Resolution Blog: Overview of Site

If you are a business that has fallen behind on 941 payroll taxes, you might have stumbled upon our 941 Tax Problem Blog today. Here's an overview of what this site has to offer:

STAYING OPEN with 941 tax issue

If your business has just had a "speedbump" in business and you have every intention to keep your business OPEN: you might consider an Offer in Compromise on your 941's. If you have burned a lot of bridges with the IRS - but think you can get back on track - you might look at Avoiding being Shutdown. And finally: if your business is solvent: here's an overview of your options: 941 tax problems in a nutshell

CLOSING THE ENTITY WITH 941 tax issue OR DEALING WITH AN OLD DEBT

If you are OK with your "entity" going away - you have to consider the benefits of dissolution on your tax debt:  Dissolution of Entity with 941's - the Benefits. What if you want to dissolve and you have ASSETS? Here's some answers:  Dissolving a Company with Assets. As the IRS has three years to assess you personally for a 941 debt (corporation, LLC, partnership only) , you have to consider your exposure: Is the IRS pursuing a ghost?

Nonetheless, the staff of Washington Tax Services has been handling 941 tax problems for over 25 years. Have us troubleshoot your tax problem by calling 1-888-282-4697 or EMAIL us HERE and we'll contact you! 

941 Tax Resolution: Dissolution of Entity Has To Be Considered

There are a number of ways to resolve a 941 tax debt that your business has fell behind on:  Offer in Compromise, Payment Plan and Penalty Abatement - even Currently Not Collectible is an option. BUT the most neglected option is simple:  dissolving your business entity and starting over.

If you are a corporation, partnership or LLC, dissolving your entity - is almost an automatic 55% reduction in the debt and in some cases a 100% reduction. The only debt that will survive a Business entity's closure is the Trust fund portion of the 941 taxes. And these taxes have to be ASSESSED by the IRS against you.  If they don't get assessed, you also have a chance of NOT PAYING ANYTHING if three years pass after the tax is due.

So - why isn't dissolution the topic of tax professionals or company's that cold call tax liens to offer tax representation services? In our opinion, we think it isn't an option in their sales pitch because they might not be inclined to charge as much to do it? Or perhaps they might feel the business themselves can manage the dissolution without them?

Washington Tax Services has an entirely different approach. We believe Dissolution should be given as much consideration as Offer in Compromise or Penalty Abatement. Remember: dissolution is almost an automatic 55% discount of the tax and you don't have to go thru months of paperwork battles to achieve the result.

A couple of caveats on dissolution:

1. If you do dissolve your entity and start a new entity - we strongly encourage you to stay current on taxes - the IRS can prosecute you for pyramiding if you are perceived as someone who opens and closes businesses repeatedly to avoid paying taxes.

2. When you do dissolve - the assets of the business are "in-play" essentially in the dissolution process . We may need to disclose their auction value to the IRS or at the very least document the value of assets to be safe if the IRS scrutinizes a past dissolution in the future. 

Has your business fallen behind on 941 taxes? Let's discuss every option under the sun - including dissolution. Call the Tax Resolution Experts at watax.com - 1-888-282-4697 or EMAIL us HERE and we'll contact you!

Tax Issues For Businesses Include State Employment Taxes as well as 941's.

Businesses that are having growing pains and who fall behind on their taxes - often find that they not only owe the IRS for 941's but State tax withholdings as well. If you are in California, for example, you might owe the EDD. Just as in the case of resolution of 941's, resolution of a state withholding issue has the following general outline:

1. Is your business going to grow and remain solvent? If this is the case - some kind of payment agreement needs to be negotiated by you or your tax professional and then later a request to waive penalties can be requested.

2. Is your business destined for dissolution and closure ? If you just can't make your business work - you might consider shutting down. Your professional will help mitigate the damage to you personally.  Quite possibly - you personally might avoid any kind of assessment. 

3. Do you believe in your business - yet believe you'll need to dissolve your entity and start over?  You might have had a bad couple of years but believe your business model has a future. If this is the case just like in example #2 above - you might consider dissolving your entity and starting from scratch with a new entity. Your tax professional will help you mitigate the damage to you personally. You'll just have to be a model business in your next go-around and be sure to be current on taxes.

Owe State Withholding? Owe 941's? Let's look at your specific situation together. Call us at 1-888-282-4697. Marty Griffith, tax resolution expert at watax.com or EMAIL us HERE and we'll contact you!

What happens when your don't file 941 payroll Taxes? Substitute for Returns (SFRs)

Many businesses that find our company - watax.com -  are in a quandary: they didn't file their 941 tax forms because they were afraid to as they might owe. Most of these companies did submit W2's for their employees to Social Security Administration - but they didn't file 941's with the IRS. Well - as you would expect - the IRS eventually comes after these businesses by

1. Filing SFRS - (Substitute for Returns) using the W2's as their basis for the 941's.

or

2. Doing an IRS audit - where the auditor essentially asks you to file the 941's thru them.

What do late 941's mean to you and what is the significance of the SFRS?

As we alluded to in an earlier post - the IRS has three years to assess the trust fund against you personally for a Corporation, Partnership or multiple member LLC. However - if the balances are created as SFR's - there is NO STATUTE TO COLLECT. The IRS can collect the SFRS without a 3 year rule.

Has your business NOT filed 941's in a while? Or do you currently owe? Let's talk. Call the tax resolution experts at Washington Tax Services, 1-888-282-4697 or EMAIL us HERE and we'll contact you!

Dissolving a Company that owes 941 Payroll Taxes: What About the Assets of the Company?

Many of our clients at WATAX - are considering dissolution of their company as a way of mitigating the damages of a 941 tax issue. As we described here: 3 Year Rule for Corps - dissolution in many situations might just eliminate the tax problem - as the debt "goes to the grave" with the business. However -- many businesses naturally have "assets" when the dissolve. What does this mean to your dissolution or in the case - where somebody wants to "purchase" your business or assets?

Selling the assets and making them lien-free. Example:  Brown, Inc. has a $120,000 941 payroll tax debt and has equipment that is worth $20,000.00 for quick value. They have decided to dissolve. Assuming that the equipment is un-encumbered with bank loans- the owners "in theory" have to give the value of these assets to the IRS. But what if someone wanted to buy the business and/or their assets? Well - that would require the owners to get an "appraisal" of the assets and have their tax professional contact the IRS to essential clear the assets of the tax lien so they can be acquired "lien-free."

What if there is no buyer? If the IRS - has someone assigned to your case -- you will definitely need to sell the assets to pay the tax debt and move on. If there is NO ONE ASSIGNED to your case - you should list the value of the assetsin a folder for recordkeeping - being fully prepared to pay the IRS the value of them - if they contact you later on.

As we have discussed previously - the IRS has 3 years to assess the debt against you personally if you had a corporation. If you were a sole proprietorship they can assess you for 10 years after the tax liability is created. These statutes aside - if you have assets - you have a lot to consider. If you have a buyer - even more things to contemplate. 

Want to size up your 941 issue ? Should you stay open? Dissolve?  Give us - the 941 tax problem experts - a call at WATAX 1-888-282-4697 or EMAIL us HERE and we'll contact you!

Three YEAR rule for assessment of 941 Payroll Taxes. Is the IRS pursuing a ghost?

As we have written on the 941 blog before - if a corporation closes owing 941 payroll taxes and three years pass by, the IRS forfeits its opportunity to assess the tax liability against the owners. Back in 2007, we guided a cleaning company to dissolve their corporation back. That company had about $100,000 in 941 payroll tax liabilities. Six years later - just last week - the IRS called to collect the debt from them. We indicated to the IRS agent- "you missed your opportunity to assess." The agent reviewed the file and came to the same conclusion - "you're right."

The case was easily resolved by us disclosing to the IRS that the business had no assets when it closed and that was it! Don't forget folks - when you have a corporation, partnership or LLC (with multiple members) - the three year rule always applies. The IRS has to assess the owners personally within three years of the debts. Otherwise - the liability dies with the entity!

What kind of entity do you have? Corporation, partnership, LLC, sole prop? What kind of 941 payroll tax liability do you have? Call us at 888-282-4697 or EMAIL us HERE and we'll contact you! Staff of Washington Tax Services. 

You are an Open and Operating Corporation: Can you file an Offer in Compromise on Unpaid 941 taxes?

In our 25 plus year history -- we at Washington Tax Services have had changing viewpoints around the IRS Offer in Compromise program as it relates to open corporations who owe the IRS. Previously - we were very skeptical about an open corporation filing an Offer in Compromise on unpaid 941 taxes based on what we saw from the IRS. In fact - very recently - we discouraged companies from doing Offers --almost unequivocally. Well -- based on some new attitudes we have seen from IRS agents in the field:  we are now...doing Offers - albeit limitedly -- for some corporations on their 941 payroll taxes.

Well -- like any Offer in Compromise -- your business will qualify for this procedure if you can clearly demonstrate an inability to pay back the debt!  As written on our other blog:  Offer in Compromise Rule Changes for 2012 the IRS Offer rules changed dramatically in 2012. The IRS has reduced the disposable income required in an Offer from 48 months to 12 months. These rule changes significantly reduced what you are required to pay in Offer -- if you qualify.

While most 941 payroll tax cases are still resolved thru payment plans and penalty abatements and/or dissolution of your entity, the Offer in Compromise program is increasingly being used as an option for companies that owe 941 taxes.

Does your open business owe 941's? Does your closed business?  Do you owe trust fund taxes from a closed business?  We are ready to answer your questions and to see if tax representation will benefit you.  Call us at 1-888-282-4697.  Marty Griffith, Tax Resolution Expert at Washington Tax Services.