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A proposed adjustment can be the death knell for a business

On Behalf of | Jul 19, 2019 | Tax Controversy

Especially when one is self-employed in a business, getting a notice of a proposed adjustment to taxes can mean a lot more than just having to come up with some extra money to pay the IRS, or the state taxing authorities, for back taxes.

Indeed, sometimes these adjustments could lead to a bill of tens of thousands or even hundreds of thousands of dollars for several years of tax returns. Few small businesses can afford to pay off a bill of this amount all at once.

Unfortunately, both the IRS and Illinois tax collectors have little incentive to be patient, as the law gives them plenty of options for collecting the back taxes owed, as well as interest and penalties. The end result could be that a business has to shut its doors due to a tax debt. Moreover, the business owners may ultimately be the ones to settle the debt with the taxing authorities.

It is important to remember that even well-intentioned people in the Chicago area can face this sort of situation. Adjustments and audits do not just happen to tax evaders and people who were deliberately cutting corners. In many cases, whether a taxpayer really should have to foot a huge bill just because the IRS has proposed and adjustment is an arguable point.

Owners of smaller businesses who get slapped with an unexpected and large tax bill may be in a fight for the survival of both their business and their personal financial stability. In these circumstances, it is often best to consult with an experienced tax attorney who can help the taxpayer evaluate his or her position and pursue available options.