One of the potential danger zones for business owners can be found in the collection and payment of payroll taxes. Far too often, owners of small businesses find that they fall behind on their bills and are tempted to use employment taxes to temporarily tide them over until things improve. There are a number of problems with this tactic, not the least of which is that the Internal Revenue Service can hit employers hard for the violation, assessing interest and penalties on top of the taxes owed.
Employment tax mismanagement can, in some cases, even result in criminal charges. Now the IRS says it is starting a new program -- the Early Interaction Initiative -- to identify employers in danger of falling behind on payroll taxes, and then help them to stay in compliance.
According to Accounting Today, the IRS says its guidance to employers will arrive in several forms, including letters and phone messages, and sometimes delivered in person by an agent. As many Cleveland business owners can attest, when an IRS officer knocks on your business door, it is time to have a discussion with a tax attorney.
While agents will invariably seem to be helpful, the reality is that a visit from a cash-strapped federal agency is not an occasion to chat. Take the agent's card, thank the agent for their time, but politely decline to discuss matters.
Give the card to a tax lawyer - someone who knows not only how to protect your rights, but also how to represent you in hearings, seizure procedures and other matters with the IRS.