Falling behind on business taxes can be stressful for any small business owner. Whether due to unexpected financial hardship, bookkeeping mistakes or simply being overwhelmed, neglecting tax obligations can lead to a stack of overdue returns and a growing sense of worry.
The good news is that you’re not alone. You can take steps to address your tax debt and move forward in compliance. Understanding the process you can follow to resolve unpaid taxes can help ensure you start getting your business back on track.
First things first
The first step is to gather all your financial records, including bank statements, invoices, receipts and any previous tax documents you might have. This will be crucial for accurately calculating the amount of taxes owed and preparing your returns.
The next step should be to get in touch with the IRS directly to determine which tax returns need to be filed. It’s important to prioritize filing these as soon as possible to help minimize penalties and interest accrual.
Once you have a clear picture of your tax debt, you can explore various options for repayment. The IRS offers several programs for businesses struggling to pay their taxes in full. These include:
- Installment agreements: This can allow you to spread out your tax debt over a manageable monthly payment plan
- Currently Not Collectible (CNC) Status: If you’re facing financial hardship, you may qualify for temporary relief from collection actions
- Offer in Compromise (OIC): In specific situations, the IRS might agree to settle your tax debt for a lump sum payment that’s less than the total amount owed
Resolving unpaid taxes may seem daunting, but you can effectively navigate this situation with a proactive approach. Remember, the IRS prioritizes working with taxpayers to reach a solution. By taking these steps, you can settle your tax debt, avoid further penalties and achieve peace of mind.
Taking control of your tax situation can help to ensure your small business’s financial stability and potential long-term success. If you’re still unsure about where to begin, seeking legal counsel can help ensure you get the guidance you need to get your business back on track.