As we found out on Monday, the “Bailout” plan was rejected by the House of Representatives. This in turn caused the stock market to plummet. The rejection of this plan could create very serious tax problems for business clients and their taxes. Whether you were in favor of the plan or against it, not being able to borrow money from banks can create 941 or payroll tax issues for companies.
There are many companies in today’s market that borrow from banks to pay their payroll, and to meet other needs, while waiting to receive payments from their accounts receivable. If companies aren’t able to borrow from their banks, they run the risk of not being able to make their withholding tax deposits. The highest collections within the IRS come from payroll taxes. This is due to the fact that the IRS views this as stealing from your employees, and the IRS itself. Typically, you will be assigned a Revenue Officer “RO” like we have discussed in previous blogs. The RO’s can actually asset the tax debt to individuals and force the company to close down if you get behind on your payroll taxes. Obviously closing down a business can only hurt the economy even more via lost jobs and revenue to the IRS. Don’t wait until it’s too late to get into a resolution on your tax debt, hire a professional that can negotiate a fare resolution with the IRS.