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I am behind in 941 payments. The IRS agent said not to hire an attorney as we can work together. Is that true?

Portland, OR |

I owe payroll taxes for 2013. I am diligently trying to keep current on 2014 taxes but the IRS agent keeps saying she is closing my doors. I am making every effort to pay the taxes, but it is the slow season and I don't have the money.

Attorney Answers 3

  1. You probably will get shut down if you don't make your current payroll taxes and pay something towards the arrears. I don't know what an attorney can do to help as this type of tax is the most vicious type of debt - you can't discharge it in bankruptcy. But you can certainly talk to an attorney and the IRS agent shouldn't suggest otherwise.

    I think you would benefit more from talking to a book keeper and a CPA that can help you figure out how to make your business more profitable by showing you where your money is going and helping you make decisions on cutting costs.

    You may need to work more hours and rely less on employees to get caught up. At some point you may just need to admit that your business isn't viable and close it down.

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  2. Consult an attorney immediately. The IRS should not be threatening you with closure and telling you at the same time they will work with you.
    You, on the other hand cannot have employees and not pay the employment taxes. You need some clear advice about your options.

    LEGAL DISCLAIMER James Oberholtzer is licensed to practice law in the Commonwealth of Virginia and the States of Illinois, Oregon and Washington. He has offices in Chicago, Illinois and Portland, Oregon. His law practice focuses on business, estate planning ( Wills and Trusts), probate administration, tax,real estate and tax exempt organizations. The foregoing statements do not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your state. The law changes frequently and varies from state to state.

  3. This is an easy one. Call a tax attorney immediately.

    The IRS agent will only work with you as long as you can meet each of her demands for payment. You need a strong advocate to push back on the agent's demands for monthly payments or lump sum payments.

    I meet with clients every week who have tried to work with the IRS agent without the assistance of a tax attorney. From my experience the cases almost always follow the same pattern:
    1. The agent will put the taxpayer on a payment plan they can't afford,
    2. The taxpayer defaults,
    3. The agent takes collection action such as levying the taxpayers bank account,
    4. Repeat steps 1 through 3 until the business is forced to close.

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