Taxation Case Study: Saving A Business From IRS Intent to Levy
Company
Retail production in Montgomery County, Pennsylvania. Revenue: $500K.
Position
Tax Advisors and Preparers
Challenge
The client became seriously delinquent on taxes, having failed to file for over six years. Further, they had not stayed on top of their bookkeeping, so they had no idea what if anything they might owe. They received multiple notifications from both the IRS and state governments, including an Intent to Levy. Upon investigation, we discovered that payroll taxes were also seriously delinquent. The client was in danger of losing both their business and their home.
Work Performed
After obtaining a Power of Attorney from the client so that we could speak to the IRS on their behalf, we reconstructed the client’s financial records for the previous six years. We filed each of the missing years and contacted both the IRS and the state for an abatement of penalty. We brought in the client’s payroll service to resolve the issue of the unpaid payroll taxes.
We then came to a Statement of Work with the client to assume their accounting needs going forward, so that this situation could be prevented in the future.
Outcome
The client is now current on their taxes, with an abatement of many of the penalties, and is no longer at risk of losing both home and business. They are paying the appropriate estimated taxes on a quarterly basis and have full visibility into the profitability of their company.