Tax Terms And Definitions
Businesses that have employees must pay taxes on the wages – called payroll taxes. This includes Social Security Taxes, Medicare taxes, and federal unemployment taxes. Even if you just have one employee, or if the employee is yourself, you may be required to pay 941 tax. Failure to pay the 941 tax in a timely manner can result in penalties, garnishments and levies. Even small businesses are subject to these requirements. To remain current with these taxes, the federal government requires most businesses to make quarterly filings and payments. This is the 941 payroll tax.
Failing to file quarterly 941 payroll taxes is a common problem when businesses have money problems. Businesses need to pay their vendors to operate, and think they can skip on paying Uncle Sam. This is always a bad decision as the interest and penalties accumulate and can cripple businesses. Fortunately, Miami Tax Relief knows several options for solving 941 payroll tax deficiencies.
The IRS assesses up to 25-percent penalties on late payroll tax payments. If you don’t pay your payroll taxes the IRS can seize your business assets or even levy on your bank accounts. If you have not filed the necessary 941 payroll tax forms or submitted payments for whatever reason, you may qualify for a reduction in the amount you owe. The professionals at Miami Tax Relief have negotiated payroll tax installment agreements successfully and we want to do the same for you.
Unfortunately it does not stop there. If payroll taxes are not paid timely, whoever was responsible for the payroll tax payments and filing could become liable to pay the “Trust Fund Recovery Penalty.” If this happens then, the IRS will make you responsible for paying the business’s payroll taxes. You could be found responsible, even if you are not an owner of the business. The professionals at Miami Tax Relief know how the IRS determines who is responsible for payroll tax problems, and we can help you.
Even if you already have an installment plan with the IRS, we may be able to get you a better deal. The professionals at Miami Tax Relief have extensive experience negotiating with the IRS, so we may be able to reduce your current installment payments. If you don’t make your installment payments, or just fail to make them then this can result in severe penalties. You can avoid these costly penalties for unpaid or late 941 payroll taxes by allowing Miami Tax Relief to deal directly with the IRS on your behalf.
Unfortunately, the IRS has the ability to take money directly from your bank account. This is called a bank levy. If this has happened to you then you know how crippling this can be. When you need to pay rent and the IRS takes money from your account for back taxes, it can be devastating. When you owe the IRS, they want your attention, often times this comes at quite an expense for you.
It is not difficult for the IRS to locate your bank or other financial institution. All they have to do is search through the system using your social security number. With this number they can get quite a bit of information, from banking institutions, to property, stocks and bonds, etc.
You only have 21 days from the date that the Bank or Institution received the levy notice to stop the levy with a release.
The seizure of your bank account is the ultimate action in their collection efforts. The IRS will send a Notice of Levy to the financial institution telling them that you owe taxes. The IRS will then require the bank to freeze all the money in your account(s) as of that day. This includes each account with your social security number. If that happens you will be unable to use any of those funds to pay your bills. This freeze will cause your checks to bounce and overdraft fees accumulate. The bank is required to hold these funds for 21 days. At the end of that period, the bank must remit the funds to the IRS.
This 21 day period allows us time to negotiate with and encourage the IRS to release the funds from levy. After the 21 day period, the bank sends the money to the IRS and it is gone!
Have you filed tax returns returns but were unable to pay the taxes due or just completed your return and owe more than you can pay? If that is the case, we can help with an Installment Agreement or an Offer in Compromise. There are options, but we must file the returns. If you don’t the penalties could be severe.
If you can’t currently pay the full amount of your tax liability, but do not qualify for an Offer in Compromise we can contact the IRS and request an Installment Agreement to be negotiated.
We will review your monthly income and living expenses, and let you know what the IRS position is on “Allowable Expenses”. The IRS definition of living expenses and ours will be very different. With your approval, we will negotiate with the IRS to have them accept the Installment Agreement to repay your tax liability.
A negotiated payment plan is much more favorable than a Wage Garnishment, Bank Levy, or Asset Seizure. This agreement, after approval by the IRS, will allow you to pay your tax liability over a period of time rather than in a lump sum.
There is no collection activity by the IRS during the Installment Agreement process. However, should you ever default on your agreement by missing one payment, or failing to pay the liability from a future tax return, your agreement will go into default and collection action by the IRS will begin.
If you would like for us to negotiate a repayment term with the IRS and put a stop to collections, feel free to contact us at any time for a FREE confidential consultation.
Stumbling into tax debt with the IRS is easier than ever before, but getting help begins with you. If you have failed to file your tax returns with the IRS or have not been able to pay your IRS tax debt, you should act soon. The tax code is complex and creates pitfalls even the most intelligent among us fall into when preparing our taxes. It is not uncommon to realize that you have tax debt until the IRS gets around to informing you. Tax debt owed to the IRS can arise from many different situations. Neglecting to file tax returns sends a red flag to the IRS to look more closely into your finances. You may employ a couple of people and fail to realize that you are required to pay payroll taxes for them. You may have filed your taxes, but been unable to pay what you owed.
Even if the IRS has not yet sent you a letter or begun collection action against you, waiting to deal with your tax problem hurts you. Penalties and interest are building on your debt, and can turn a small tax problem into a large tax problem. Penalties and interest are building on your debt, and can turn a small tax problem into a large tax problem.
You may first find out you have IRS related tax debt when you don’t receive your tax refund years later. If the IRS determines you owe them money from a previous tax year, it is perfectly legal for the IRS to keep any refund it owes you for the current year. Since many families are counting on their tax returns to pay bills or go on vacation, failure to get money back can be a blow, and it may not end there. If your current refund doesn’t cover your tax debt, more problems arise.
Interest and penalties will quickly snowball your small tax debt into large tax debt. It is not uncommon for IRS tax debt to become so large that you could never realistically pay it all back. However, in those cases, you may be able to settle your debt with the IRS for a smaller amount. This is done by filing an offer in compromise, which is a request to base your debt on what you are able to pay.
The next step in getting IRS tax help is to find a reliable and knowledgeable team of tax professionals. At Miami Tax Relief, we recommend that you check out every company you are considering at both these sites before making your decision. Your research may lead you to a multitude of tax help services, but they are not all qualified or reliable.
During a complimentary consultation, our tax experts can determine which tax debt solution is best for you. Our entire team of experts can then put the plan into effect to resolve your tax problem. Our specialty is negotiating tax debt settlements and resolutions with the IRS.
The IRS has several collection tools at its disposal. The IRS can garnish your wages by way of a levy, forcing your employer to send a large percent of your paycheck to them. The IRS can even issue a levy to take money from your bank accounts or stocks from your broker! Ignoring your IRS tax problems can have serious repercussions.
American tax law allows the IRS to force other people (third parties) who have control of your assets to give those assets to the government. To get the tax money you owe, the IRS may send a notice of third party levy to your stock broker. Your stock broker must then forbid you from selling or trading your stocks for 21 days. At the end of the 21-day freeze, the broker must sell your stock and send the profits to the IRS.
The same can be done to your bank accounts. It is relatively easy for the IRS to locate all of your bank accounts using your Social Security number. Once they locate your accounts, the same 21-day freeze followed by payment of the funds to the IRS follows. This is true regardless of how long you’ve held the accounts or whether that money is earmarked for a vital personal expense. It is also true even if you are only a co-signer on an account, so beware of other accounts you may be on (kids, family members, etc.)
It is always in your best interest to avoid IRS tax levies. You cannot get back your money or negotiate for a lower amount once the levy has been satisfied, but until the 21 days are up we can help you fight!