Being a business owner is hard work even under the best of
circumstances. When things go wrong, however, and when you find yourself owing
taxes, things get even harder. In fact, many businesses crumple under the
pressure; one of the most common approaches, if you can even call it that, is
just to ignore the problem and to hope it goes away. Newsflash: it doesn’t!
Ignoring owed taxes just makes the issue worse and more urgent.
There are many other “wrong” things you can do as well,
things that could land your business in more trouble than it is already in.
Thus, when you learn that your business owes taxes, it is extremely important
that you know what NOT to do.
DON’T Throw All Your Money Away
To begin with, don’t make the mistake of emptying all of
your accounts and, in short, everything that you have in an attempt to take
care of your little (or not so little) tax problem. Sure, paying off a large
chunk of what you owe can help, but unless you can pay the full amount all in
one go, which isn’t likely, you are just setting yourself up for disaster.
Making a large payment, even if it takes everything you
have, might make the IRS think you’re made of money, which will make it even
more demanding when it comes to collecting on the rest of what you owe, which
could flat out ruin you and leave you and your business penniless. Even worse
yet, it could make the IRS wonder where you got all that cash, triggering an
audit and a deep investigation into your business on-goings that you are likely
unprepared for.
A much better solution is to, with the help of a
knowledgeable tax adviser, work out a reasonable, consistent payment plan with
the IRS to settle what you owe in a long-term agreement. Not only will this
help you to avoid the problems and scrutiny described above, but it will also
help you to keep your finances in check and to avoid going destitute while
paying off the IRS.
DON’T Parlay Over Full Responsibility
As mentioned, it is smart to find a tax adviser/ financial
adviser who can help you to work through your difficult tax situation. The key
thing there, however, is to find someone who can HELP you, not someone who will
take over everything for you and leave you out of the loop.
No matter what may transpire in the course of owing and paying back taxes, it is still important that you maintain control over your
business. After all, it is just that- YOUR business. If you do hand over full
responsibility, you could end up with a business that is unrecognizable. Most
people who take full control are going to work in the immediate best interest
of your business, not in its long-term best interest, so you could come back to
a business that, while its taxes may be paid, is in serious shambles.
It’s best to stay involved and in the loop. Look for an
adviser that will carefully explain to you what each decision means, both now
and in the long-run, and that will help you to make the best possible choices
for your business overall.
If you can follow these simple tips and stay involved in the process, you can avoid turning your situation into something bad and ultimately come out on top.