WA State and IRS tax problems due to being put out of business by competitors hiring illegal workers.

Tacoma, WA Viewed 414 times. Posted about 1 year ago in Tax

I had a business in the wood pallet industry for seven years(ending in 1996). I had the business doing two million dollars a year in revenues. I hired only legal American workers and paid them well. But I could not compete with everyone else in the industry that used illegals. The Federal Gov't would not enforce its own rules hence I'm out of business. I owe $24,000 in State taxes and now owe IRS taxes the last four years because Washington state kept garnishing my wages so I've had to work under the table since 2004. Any suggestions on what can do? I have no money to negotiate.......thank you..... - Is this your question? Add additional information

Answers (3)

Lawrence Neil Rogak

This attorney is licensed in Colorado and 1 other state. Posted about 1 year ago.

There is something called an "offer in compromise" where you can negotiate a settlement of back taxes owed to the IRS. It often helps in situations like yours where you are no longer making the kind of money you used to. Talk to your accountant or a Washington tax attorney (use this web site to find one) about negotiating your back taxes. Good luck.

Sharon Elizabeth Chirichillo

This attorney is licensed in Washington. Posted about 1 year ago.

Keep in mind if your business was incorporated the IRS can try to pierce the corporate veil and go after the officers of the corporation to collect money owed. IRS will also want to have your accounts receivables and go after those vendors. It is ESSENTIAL to get a TAX ATTORNEY. Look here at www.avvo.com or www.martindale.com for refernce. Both the IRS and DOR are not entiies to take on as an indiviual. I represent many folks on the criminal defense end to tell you to know better.

Justin Dain Hein

This attorney is licensed in California and 1 other state. Posted about 1 year ago.

Well, working under the table is just going to exacerbate your current problem with both Washington and the IRS. It is going to result in you owing taxes every year moving forward.

As mentioned above by my colleagues, you really need to speak with a Tax Attorney whose focus is Tax Debt Resolution. They can review your financial situation to see what type of debt resolution programs you qualify for. For the IRS, the might be an Offer in Compromise (i.e. settlement), Installment Agreement (i.e. monthly payment plan based upon income>expenses), Streamlined Installment Agreement (i.e. monthly payment plan based upon how much you owe), or Currently Not Collectible status (i.e income<expenses, thus stopping collections). Once set-up on any of these programs, the IRS will no longer levy your wages or bank account.

As for your Washington taxes, well Washington doesn't have corporate or personal income taxes. They have what is called a "Business & Occupation" tax based upon the gross receipts (i.e. gross income of the business). You will undoubtedly need to speak with a Washington-based Tax Attorney for dealing with your state back taxes.