Does your Small Business Owe Payroll Taxes?

Everyone knows it is best to pay your payroll taxes on time to avoid penalties and interest, however if you find yourself behind paying as soon as possible can assist you in avoiding unwanted additional fees. The goal should be to contact the IRS, or a tax professional as quickly as possible to discuss your options. Doing nothing is the most common and biggest mistake you can make.

Small businesses who qualify may be able to make monthly payments via installment agreement. Though interest and penalties may continue to accrue, an installment agreement may be your best option. In addition, if you’re small business is behind on payroll taxes, your company may qualify for an In-Business Trust Fund Express Installment Agreement. These agreements allow you to make monthly payments while avoiding the hassle of providing volumes of financial information. Also, since these agreements involve taxes withheld from your employee’s paychecks the IRS may implement additional procedures to ensure the ability to make Trust Fund Recovery Penalty assessments (TFRP). These assessments can be made against individuals within your business who carry the responsibility of paying payroll taxes, and have demonstrated an unwillingness to do so in a timely manner.

To qualify for an IBTF-Express IA, the tax debt must be $25,000 or less at the time the agreement is established. If more than $25,000 is owed, you can first pay down the liability to $25,000 or less in order to qualify, the debt must be paid in full within 24-months or prior to the collection statute expiration date, whichever is earlier, a direct debit installment agreement must be used if the amount owed is between $10,000 and $25,000, and all required returns must be filed and your business must be up to date with all payroll taxes for the current quarter.

Should you need assistance, please contact Advantage Tax Services, Inc. (404) 736-6084 and you will be connected with a licensed tax professional that will answer your questions and provide assistance with your tax issue.


Kenyatta Patton, EA, MAMF

Buying a Home with a Federal Tax Lien

For some mortgage lenders having debt and being in collections won’t necessarily stop you from purchasing a home. However, things can be more difficult if that debt derives from the internal revenue services. Unpaid taxes may trigger a lien on your property. This protects the government’s monetary concern, as it relates to your unpaid tax debt.  It also causes concern on behalf of prospective lenders.

Don’t give up because it’s not that you have a lien, but what you are doing to deal with it. First and foremost, a federal tax lien is not just a piece of paper that can be made to go away. Once the lien is in place it will be there until the outstanding tax liability has been satisfied, or becomes out of statue. Even bankruptcy, in most cases want rid you of your tax lien issue. Here are some things that could help:

1. Make sure you are tax compliant. If you have unfiled taxes or taxes that the IRS filed for you there could be a dramatic difference in your balance. The IRS does not know what deductions you may take, and files your taxes without any consideration to potential credits or deductions that could reduce your tax liability. In addition, the IRS will not offer any resolution option to tax payers who are not compliant.

2. If it is determined that you cannot pay outstanding amount within the time period given, usually 10 days from the date of the lien notice; attempt to enter into a installment agreement. If this doesn’t work for you, then have your account placed in a “Currently Not Collectible” (CNC) status. The IRS will not implement further collection action toward tax payers in CNC status. However, they will review your status every 18 to 24 months to determine your continued eligibility for this program.

3. Attempt an Offer-In-Compromise. This could afford you the ability to pay a dramatically reduced amount to settle your tax debt, thus remove the federal tax lien on your property.

4. Request Lien Subordination. Lien Subordination is when a creditor releases their place in line. In other words, they agree that any profits from the sale will go directly to the IRS. The only way around this is if the IRS grants lien subordination to another mortgage company. Generally, only approves lien subordination for things like refinancing due to several home owners being trapped in a mortgage that has a high interest rate, and by doing so the tax payer gets a lower interest rate and/or a lower mortgage payment.

5. If you are military you may qualify if they have done the following:

  • Made acceptable payment arrangements and made on-time payments for at least 1yr.
  • Referenced the outstanding tax lien on the loan app.
  • Can afford the mortgage and the payment commitment made in the repayment plan.

Of Course, the best solution is to pay the tax liability in full. Unfortunately, that’s not always possible. If you find yourself in this or any other situation and would like assistance, call Advantage Tax Services, Inc. (866) 606-3570. You will be connected with a licensed tax professional that can answer your questions and advise you as to your best option(s).

Kenyatta Patton EA, MAMF

Surviving an IRS Audit

Surviving an audit boils down to one simple thing. You must be prepared. If you find yourself in the unfortunate circumstance of facing an audit and you don’t have documents to substantiate deductions and/or income, seek professional help. A licensed tax professional, preferably one with bookkeeping experience can assist you in re-building your records and compiling the kind of documentation needed to survive the audit.

Here’s why I suggest hiring a tax pro.

1. A tax pro would be familiar with terminology used in the IRS’s request for information letter. This will assist you in facilitating items required in a way that saves both time and money. It also reduces the chance that you may hire someone to compile data that’s not required.

2. A tax pro has a working knowledge of IRS rules as it relates to deductions like the 179 expense deduction, claiming a relative, how tax on social security is determined, and complex business deduction issues. This can provide meaningful insight to what liabilities you may face as a result of claiming these deductions in error.

3.  A tax pro will quickly identify errors made by the auditor. Often auditors could lack experience related to your specific tax issue. This is especially true if a business is involved. Often there could be complex tax issues that auditors lack the expertise needed to properly apply the tax code.

4. There’s a higher probability that missed deductions could be identified and applied. This could off-set any tax liability incurred as a result of the audit.

5. The stress that comes from being uncertain about outcomes could be reduced dramatically by hiring a tax pro. You now have a professional advocate that will serve as a buffer between you and your IRS auditor.

You may feel you have the knowledge to handle the audit alone. By all means, go for it. You will most likely be required to respond to general questions about your finances and business. Make sure you keep your answer short, to the point, and answer honestly. Don’t volunteer information that has not been requested. You may cause the scope of your audit to expand making your problems more serious. In addition, you have the right to stop the audit anytime you like to consult with a tax professional.

Should you need additional assistance, please call Advantage Tax Services at (866)606-3570 to be connected to a licensed tax professional.


Kenyatta Patton EA, MAMF

Understanding IRS Collection Action

The IRS uses different terminology specific to the collection process.  Often, tax payers misinterpret the meaning of terms used in letters received due to an outstanding tax liability. Below is a brief listing of some of the more frequently used terms.

Notice of intent to Levy and Notice of your Right to a Hearing

This letter is sent by the IRS after initial efforts to collect outstanding tax liabilities have been exhausted. Generally, a notice to levy indicates the IRS’s intent to seize property unless steps are taken to resolve the balance within a specified period of time. Normally thirty days. However, there are instances when the IRS doesn’t provide a thirty day notice. Some examples include collection of tax liability is in jeopardy, state tax refund seizure, and a Disqualified Employment Tax Levy is served. The following things have to happen before a levy is executed.

–          Your tax has been assessed and you have been sent a bill.

–          You have failed to respond or pay your tax liability.

–          A Final notice of Intent to Levy and Notice of your Right to a Hearing has been sent 30 days before seizure of    property.

The IRS can seize all types of property. Examples include cars, homes, bank accounts, wages, and social security income.  Property that can’t be seized include unemployment benefits, certain annuity and pension benefits, certain service connected disability payments, workers compensation, certain public assistance payments, minimum weekly exempt assistance under the Job Training Partnership Act, and income from child support payments (IRS Publication 594).

There is no difference between seizure and levy. They both constitute intent to confiscate property for the purpose of resolving an outstanding tax liabilities.

Federal Tax Lien

A Federal Tax Lien is a legal claim against all your current and future property. In most cases, a lien will be filed if you don’t pay your tax liability after receiving your first bill. The lien is filled to serve public notice to creditors and to establish priority of claim, as it relates to other creditors. Unfortunately, this can negatively affect your credit due to liens being reported to consumer credit reporting agencies.


A summons compels you or your representative to meet with the IRS for the purpose of providing testimony, quantifying documents, and other forms of information.

Do you need help? Call Advantage Tax now at 866-606-3570 and you will be connected to a licensed professional who will answer all your questions and provide a IRS approved resolution specific to your tax issue. Mention this article and receive a FREE written Tax Debt Resolution evaluation.


Kenyatta Patton EA, MAMF

Applying for IRS Penalty Abatement

The IRS currently accepts three different ways of applying for interest and penalty abatement. It is very important that you understand what the IRS looks at before granting these kind of request. The three ways to apply are as follows:

–          IRS Form 843 – Listed as “Claim for Refund and Request for Abatement”, it is generally submitted with a brief

statement attached. Please remember to attach copies of documents relative to why you feel your interest and

penalties should be abated.

–          Verbally –  The IRS allows you to make this request over the phone or in person.

–          Written Petition – You may submit a letter explaining why your interest and/or penalties should be abated.

In all scenarios remember to never send original copies, as these can be lost in the mail and require significant difficulty to recover. Your reason needs to explain why you failed to file and/or pay whichever is applicable to your situation.

If you need assistance, call Advantage Tax now at (866) 606-3570. You will be connected with a licensed tax professional who will provide you with a FREE written evaluation regarding your specific tax issue.


Kenyatta Patton EA, MAMF

State Tax Debt Resolution Information

Often, taxpayers that owe taxes have tax liabilities with both the federal government, as well as the state. All states have taxation laws specific to their jurisdiction and a set of collection process and procedures that’s separate from the IRS. All though some state resolution process and procedure may be similar to the IRS, taxpayers are still required to submit separate paper work for every applicable process. It is not recommended, but if you are resolving your tax issues on your own be sure that you become familiar with both federal and state laws to ensure you completely resolve your tax issue(s).…nd-information/ 

The above will direct you links to each state’s revenue department were you will find valuable information regarding how to resolve your tax issue in your state. If you need help with your tax issue, please call Advantage Tax now at (866) 606-3570. You will be connected with one of our licensed tax professional that will provide you with a FREE written Tax Debt Resolution Evaluation. For additional information on resolving tax debt issues, please subscribe to receive free special reports, webinar invites, and many other helpful tips you could use to resolve your tax problems.

Kenyatta Patton EA, MAMF

Offer-In-Comprimise (OIC)

The IRS now offers a fresh start to tax payers who currently have outstanding tax liabilities.  Program changes include the following:

  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
  • Creating easier access to Installment Agreements for more struggling small businesses.
  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.

The goal is to provide an easier path to resolving your tax issues. If you need assistance with taking advantage of the newly implemented resolution opportunities please post your question or call Advantage Tax Now! (866) 606-3570.


Kenyatta Patton EA, MAMF