Small business owners (SMBs) put in countless hours at work to make sure they succeed. As an owner, you work extremely hard for your business, so naturally, you will do whatever it takes to prevent it from falling apart.
Sadly, the IRS can target your business if you owe back taxes. The Internal Revenue Service is a powerful agency that can use some very drastic measures to demand back payment.
There are situations where the IRS will attempt to seize your business, so making yourself aware as an SMB owner is necessary.
IRS Collection Process
It is important to file a timely and accurate tax return each year to the IRS. Though you may have concerns about how you will pay back taxes, simply ignoring the IRS is not an option. The agency penalizes you more harshly for neglecting to file a return than it does for having trouble paying back taxes.
The IRS will contact you via mail if you owe the federal government money. Overdue tax debts are subject to penalties and interest, so swift action is important. The longer a balance remains unpaid, the larger the outstanding debt becomes.
If you know you won’t be able to pay back the full balance anytime soon, it is a good idea to take action sooner rather than later. The IRS offers installment agreements that allow you to make monthly payments. You can also attempt to settle through an Offer in Compromise (OIC).
Failure to take action will prompt the IRS to begin the collection process which can include tax liens and levies, as well as seizures of personal and business property.
IRS Business Seizure
The IRS has the right to seize your home or business for outstanding debt. It is authorized by the Internal Revenue Code. An IRS District Director has the leeway to seize homes and businesses through the Internal Revenue Service Restructuring and Reform Act.
There is very little that the IRS is not allowed to seize, so you want to avoid this measure if at all possible. The IRS can enforce collection through levies, seizures, and public sales that could destroy your small business.
Business Seizure Process
The IRS must follow specific rules to seize your small business.
First, the agency must receive permission from you to enter your business establishment. You can refuse permission, however, the IRS will likely apply for a seizure order with a U.S. District Court. If the judge approves the order, the IRS now has legal access to your business.
The agency will allow you to collect small personal effects but may seize anything else from your home or business. The IRS will also padlock the premises, post notices to the public, and arrange to sell the assets of the business in an auction.
Avoid Illegal/Unethical Business Seizures
Fortunately, business or home seizures are often unnecessary. However, there is also the possibility that the IRS is acting illegally.
For example, sometimes a business seizure takes place because there is poor communication between the taxpayer and the IRS collector.
There is no reason you shouldn’t be able to negotiate a more reasonable solution that avoids losing your home or business. Though the Internal Revenue Service Restructuring and Reform Act granted IRS agents more accessibility to seize SMBs, it also provided new avenues of relief for taxpayers.
Taxpayers can petition a home or business seizure by disputing the amount the IRS claims you owe. You can also go after overzealous collection agents.
The Best Tax Debt Defense
You shouldn’t have to challenge the IRS on your own. Levy & Associates recognizes small business owners work very hard for their home and business. We want to help you avoid any seizure of personal property.
If you owe a sizable debt that you are concerned about paying back, contact us ASAP. Levy & Associates can help your business deal with liens, levies, and seizure threats. Call us at 800-TAX-LEVY, or visit www.levytaxhelp.com.