There are many different types of tax returns that businesses file. Corporations usually file Form 1120 with the IRS each year. Tax returns for partnerships are typically filed on Form 1065. In addition to quarterly federal Forms 941 or 944 tax returns, you must also file an annual Form 940 tax return if you have an employee. As a retailer, you must also file a sales tax return with the Illinois Department of Revenue or another taxing authority, if you sell anything at retail. Businesses are often burdened with an enormous amount of government regulation.
Business owners who are not as profitable as planned or who suffer a sudden downturn in business may stop depositing their federal and state taxes on a regular basis. There is hope for the company to turn around and “catch up” on its tax liabilities soon. Business owners who do not make their federal tax deposits on time and in full may not be pleased with the IRS’ view of them. If the IRS does not take swift action, the IRS will take strong measures if the employer uses employees’ money for its business. Under the Trust Fund Recovery Penalty, the IRS may take enforcement action against the business as well as take individual action against the business owners, officers, and shareholders.
Case study: Employer Stops Paying Gross Payroll to Keep Paying EmployeesIn this case study, even though our taxpayer was in business for many years, the downturn in the economy caused a 50% drop in our taxpayer’s business. Many of our taxpayer’s employees had been with the business for many years and had become close friends. Not wanting to lay off his employees, our taxpayer stopped making gross payroll, meaning that he stopped making his federal tax deposits. The taxpayer felt a greater loyalty to his employees and their jobs than to the IRS. Unfortunately, the IRS soon became aware of the unpaid liability and threatened to seize the business. The taxpayer contacted IRS Trouble Solvers, LLC and we were able to negotiate a resolution for our taxpayer. The resolution negotiated by our tax attorneys allowed the business to keep its doors open, for its employees to keep their jobs and for the business to continue its vital role in the community.
If you have unfiled business tax returns or unpaid tax liability, the IRS Trouble Solvers™ Seattle can help. Your BEST bet to resolve your IRS Debt!®