If your business has an outstanding tax liability, the accountants and bookkeepers at Las Vegas Bookkeeping can help you determine the best way to resolve it. As with any back tax balance, the best course of action is to face it head on rather than ignoring it and hoping it will go away. Tax liabilities continue to collect penalties and interest as long as there is an outstanding balance and bring more serious consequences such as tax liens and tax levies if left unresolved over time.
Some of the methods for resolving an outstanding tax liability are described below:
Pay the Balance in Full
The easiest way to resolve an outstanding tax liability is to pay the balance in full. If sufficient funds are not readily available, it may be possible to pay the back tax balance by taking out a bank loan or drawing on an existing line of credit.
Request an Extension
When a business expects to have the necessary funds to pay an outstanding tax balance within 120 days, they can apply for a short term tax extension. Although interest will continue to accrue, no additional penalties will be assessed and no collection activities will be initiated during the extension period.
Request a Penalty Waiver
When a business is able to provide evidence that they were unable to meet their tax obligations due to circumstances beyond their control, they may be granted a Penalty Waiver. This is a tax settlement option whereby the IRS or State Tax Agency either reduces or eliminates previously assessed tax penalties.
Negotiate an Installment Agreement
When sufficient funds are not readily available to pay the full balance of an outstanding tax liability at one time, a business may apply for a tax settlement option called an Installment Agreement. This allows a business to pay a back tax balance over time, with the amount and timing of the payments determined by the tax amount due and the financial situation of the business in question.
Negotiate a Partial Payment Installment Agreement
If a business is able to show that it will be unable to pay the full balance of a tax debt at any time in the near future, they may qualify for a Partial Payment Installment Agreement. This is a tax settlement agreement whereby the collecting tax agency agrees to settle a back tax balance for less than the full amount owed.
If your business has an outstanding tax liability, the professionals at Las Vegas Bookkeeping will help you resolve it. Our professionals have extensive tax settlement experience and will use it to help your company negotiate the best tax settlement option available for your company’s specific set of financial circumstances.
Call us today at (702)514-4048 to inquire about our accounting and bookkeeping services, or contact us to receive a free, no obligation consultation.