How the IRS Collects Payroll Tax Debt
Small business owners have been identified by the IRS as the largest source of uncollected taxes, so the IRS tends to put focus on enforcement of collection against small business owners, especially during hard economic times. Because of how aggressive the IRS gets when dealing with delinquent payroll taxes, the process of resolving this matter can become challenging without professional assistance to get you through the process.
The IRS can seize your business equipment and assets and sell them at auction, effectively putting you out of business by limiting your ability to operate. The IRS can also contact customers who owe you money and tell them to send it to them directly rather than sending it to you. This in turn, can affect your ability to pay employees and other bills, as well as your current and future taxes.
The IRS has the ability to padlock the front doors of your business, making it impossible to continue operations. Your employees, vendors and customers can all come to your place of business and find that the IRS has shut you down.
In extreme cases, the IRS may seek criminal penalties against responsible parties.
Furthermore, the IRS, once they contact you, will expect you to stay current with your Federal Tax Deposits from that point forward and not accrue any new liabilities. This means not only paying them in full, but paying them on time based on your deposit schedule according to how often you process payroll. Should a business accrue a new liability once they are dealing with an IRS agent, the business’ chances of being able to obtain an agreeable payment plan diminish.