The First Step to Resolving a Payroll Tax Debt?  Compliance!

Education & Training with Tax Rep LLC

Businesses that fall behind with payroll taxes are the number one source of new clients for most tax rep professionals.  The major issue many of these clients has is confusion about what to do first.  Often we hear “I should make a payment against the oldest period first, that way the IRS knows we are serious.”

No they don’t!

The IRS does not think that way.  The first step to do anything with the IRS is to get into tax compliance first.

What is “Tax Compliance”?

In order for the business to have any chance of surviving the tax debt issue is being able to get back into tax compliance, meaning it is filing and paying the payroll taxes on time.  If the business is unable to do this, then it needs to shut down, or the IRS will force the issue by levying the bank accounts and effectively making it impossible to operate.  The reason is that, if the business is not in compliance then it simply keeps stealing the government taxes to fund its operations, and the IRS will not allow that to continue.

So the first step in resolving the back taxes is to start paying the current taxes.  Its counter-intuitive, but that is how this works.  Begin paying the current quarters taxes immediately, and then submit a Collection Information Statement to work out a collection alternative on the back taxes.

So the takeaway here for tax professionals as well as tax owners, is focus on the current taxes first, and then work on a resolution for the back balances.  Trust me, the IRS will thank you for it!

If you or someone you know has a tax issue and needs help, please feel free to contact me either at or at (203) 285-8545.

Eric L. Green, Esq.

Green & Sklarz LLC

1 Audubon Street, 3rd Floor

New Haven, CT 06511

(203) 285-8545

Posted by

John Pusa
Glendale, CA

Hello Eric L. Green very good helpful report about first step to resolving a payroll tax dept.

Apr 21, 2024 03:10 PM