Archives for September 2010

The Tax Resolution Institute Helps San Francisco Serial Entrepreneur With IRS Tax Debt Relief

When a Serial Entrepreneur in San Francisco found himself over-extended due to the recent recession and with serious IRS back debt due to back taxes owed, he came to the Tax Resolution Institute to save both his personal fortune and his reputation. By taking what could have turned into a major public and personal tax debt disaster with an IRS tax lien and eventual IRS tax levy, the tax resolution specialists at TRI, including our experienced IRS tax attorneys and IRS tax lawyers, were able to negotiate a combination of both an Offer in Compromise and an Installment Agreement to cover the multi-layered back income tax bill. By employing a variety of effective methods, TRI allowed the serial entrepreneur to continue to be an example of the American dream realized beyond the demands of the largest collection agency in the world, the Internal Revenue Service.

Entrepreneur Dogged By The IRS

Entrepreneur Dogged By The IRS

The American dream is a reflection of the entrepreneurial spirit expressed in the business world. By creating opportunity and transforming potential ideas into viable realities, the entrepreneur allows America to continue to prosper and expand its thriving consumer-based economy. A serial entrepreneur is not satisfied with a single successful venture, but rather moves from one venture to another, creating and investing in a road map of business ventures that eventually can turn into an empire. Often, a serial entrepreneur walks a fine line between capital and costs, investing the profits from one venture into the vision of the next.

The Serial Entrepreneur in San Francisco is a perfect example of such an important figure in the California economy who was caught in the sudden vise of the economic downturn. When the recession hit, several of his ventures went into the red at the same time while other new deals already invested in fell through, leaving the entrepreneur holding the bag. Although he was able to cover most of his debts, he found himself with a huge back income tax debt on income that no longer even existed. Even if the recession had wiped the income off the proverbial table, the Serial Entrepreneur still had to pay off a huge income tax bill. When his available funds dried up, he found himself with a looming delinquent tax bill and the IRS calling his office and his home, looking for answers.

Entrepreneur With IRS Tax Debts

San Francisco Entrepreneur With IRS Tax Debts

Luckily, the Serial Entrepreneur came to the Tax Resolution Institute and our tax resolution services specialists knew just how to handle his income tax case. Since the taxes owed were from different revenue streams, a multi-layered deal was able to be negotiated. First, an Offer in Compromise settled well-over half of the tax bill, saving the Serial Entrepreneur a lot of money and keeping his name out of the papers. By avoiding a tax lien and eventual tax levy, his reputation remained stainless and his anonymity protected. For the remaining portion of the back income tax bill, a tax attorney at TRI negotiated an Installment agreement that covered the rest of the back tax debt and allowed him to pay his delinquent tax bill over a reasonable period of time. Today, the Serial Entrepreneur is back on his feet and helping California to recover from the recession and enter the forefront of American success stories.

San Francisco Entrepreneur Finds Tax Resolution

San Francisco Entrepreneur Finds Tax Resolution


New Jersey Payroll Tax Debt Solved After Newark Fish Market Falls Behind On IRS Payroll Tax Debt

Providing tax relief services and payroll tax solutions to businesses across the country, the Tax Resolution Institute is proud when our tax experts are able to keep the doors open of a once thriving business in Newark, New Jersey by averting a serious payroll tax problem with the IRS. In tough economic times, companies across the United States are finding themselves in a financial tax squeeze, unable to avoid dipping their hands in the trust fund owed to the IRS in order to cover outstanding debts and immediate costs. What most company owners do not understand is that playing with Payroll Taxes and the IRS Trust Fund is like playing with fire — there is a good chance that your casual choice will leave your business ventures in flames, burning down your future hopes of profitability.

In Newark, New Jersey, a once thriving high-end fish market found their business under the gun when demands by restaurants for the expensive end of the catch began to die down with the recession. Suddenly, although the fish market had the same number of workers to be paid and continued to take on large and expensive catches due to pre-existing contracts, the fancy fish were left either to go bad on ice with freezer burn in their warehouse or had to be sold at virtually pennies on the dollar. In either case, profits quickly dried up, and the owners of the fish market found themselves under the gun — bills to pay, costs to cover, and not enough money coming in the front door.

Unpaid Payroll Taxes Threaten A Newark Fish Market

Unpaid Payroll Taxes Threaten A Newark Fish Market

Although they managed to cut back by reducing their staff, they had faith in the return of the good old days and they did not want to seem weak and lose their best customers that still remained. In the thick of the financial storm, it was important to show a brave face. As the recession deepened and sales continued to decline, the initial payroll tax crisis became a real disaster, threatening to permanently close the doors of the fish market. Although the owners had yet to hear from the IRS, they knew it was only time before the other proverbial show dropped. With America in a recession and the federal government in distress, the Internal Revenue Service is going after unpaid payroll taxes with a renewed focus and energy, making sure that businesses are paying their fair share and covering the tax debt of the trust fund. If the trust fund comes up short, the trust fund recovery penalty kicks into action.

The Trust Fund Recovery Penalty, otherwise known as the 100% Penalty, is designed to keep business owners honest and protect the trust fund owed to the IRS. If the trust fund is not covered in full when due, the trust fund recovery penalty means the business owner will not only have to pay the original trust fund amount plus interest but will also be penalized 100% of the original amount due. Such huge penalties have sunk many a thriving business, leading to bankruptcies and closed doors.

Tax Relief Services Keep The Doors Open

Tax Relief Services Keep The Doors Open

Knowing the possible threat looming, the Newark Fish Market in New Jersey came to the tax experts at the Tax Resolution Institute for help. With extensive experience working with the IRS and negotiating workable outcomes in unpaid payroll tax cases, the Tax Resolution Institute is a refuge for companies when the IRS threatens to close their doors. By explaining the situation to the IRS Revenue Officer while offering immediate payment of the back payroll taxes owed, the 100& penalty was waived in order to keep the doors of the business open. In addition, an Installment Agreement was negotiated to cover the interest portion of the trust fund over a reasonable period of time as the fish market recovered from the financial crunch. Although times are still tough, the Tax Resolution Institute is proud to say that the doors of the Newark Fish Market in New Jersey remain open and the workers are still working.

Helping Silicon Valley — Tax Relief Services In San Francisco, Santa Clara, Palo Alto & San Jose

As the California economy slowly rebounds from the worst of the recent recession, many individuals in Silicon Valley find themselves with serious income tax problems and in need of expert tax relief services. From San Francisco to Santa Clara, Palo Alto to San Jose, a multitude of high tech workers and entrepreneurs suffered an extreme economic crunch, resulting in deferred bonuses, lower commissions, and lost jobs. As a result, when tax time came around, there was no money saved to pay the IRS and tax problems arose. If you are in a tax crisis and want to rebound with the economy, contact the tax experts at the Tax Resolution Institute. We can provide you with the very best in tax relief services to address your income tax problems and get you back on your feet.

IRS Income Tax Debts In Silicon Valley

Internal Revenue Service Income Tax Debts In Silicon Valley

Considering the overall state of the American economy, it is not surprising that high tech companies were forced to cut back both financial benefits and their workforces when the recession came and tax problems arose. After all, orders dried up along with investments and venture capital, resulting in a loss of opportunity and productivity. The best in tax relief services from TRI is a necessity for innocent high tech employees who were suddenly caught in the middle.

With profits gone, salaries cut and jobs lost, many talented workers who had experienced nothing but major prosperity for years found themselves facing huge income tax bills from the previous year with all the money spent. Imagine finding yourself with a huge tax debt owed to the Internal Revenue Service and no financial resources to cover that looming back tax bill. Luckily, thanks to the expert tax relief services provided by the Tax Resolution Institute, there is a light shining through the darkness.

The weight of your income tax debt can be relieved by negotiating with the IRS and providing you with an Offer In Compromise if you are eligible or a reasonable Installment Agreement to pay your back tax debt off over time. In addition, if you also are in a tax bind with the California Franchise Tax Board, there is a workable answer for that state tax debt as well. With years of tax resolution services experience and tax relief services expertise, the tax experts at TRI can handle even the most complex income tax problems and tax challenges.

High Tech IRS Back Income Tax Debts

High Tech IRS Back Income Tax Debts

Please remember that the IRS is the largest collection agency in the world, and your back tax debt will not be forgotten. If you were caught off guard by the economic downturn in Silicon Valley and you need tax relief services, do not hesitate. Contact the Tax Resolution Institute, whether you live in San Francisco or Santa Clara, Palo Alto or San Jose, we can help turn your IRS income tax problem and/or California income tax problem into an income tax solution that works for you.

Payroll Tax Problem Solved In California — San Diego General Contractor Keeps Building!

In a challenging California economy, TRI realizes that general contractors have found their work schedules shortened and the best jobs more competitive to bid on. After thriving in the first part of the decade, many of these companies have been forced to make tough decisions in order to keep their doors opens and the profits flowing. Recently, a major San Diego general contractor approached the Tax Resolution Institute because the recent difficulties had led to poor decisions in regards to unpaid payroll taxes that placed their future in jeopardy with IRS Revenue Officers.

When crunch time came and bills needed to be paid, the general contracting company found itself short of the cash necessary to cover the costs. Believing that a number of major payments were on the horizon, the principals made the mistake of taking money from the payroll tax trust fund owed to the IRS to make up for the lack of funds. What they did not realize is that messing with Payroll Tax payments to the IRS can often be the final straw that breaks the proverbial camel’s back.

IRS Payroll Tax Debts In San Diego

IRS Payroll Tax Debts In San Diego

When the San Diego general contractor came to the Tax Resolution Institute, one bad move had snowballed into a full blown crisis. When the payments did not come in and the bills continued to pile up, the first choice to take from the trust fund made the second one easier to make. By the time the IRS caught up with the lack of payroll tax payments, there would be enough money in the company coffers to cover both the payroll tax debt and the resulting penalties. What the company did not realize was that the Trust Fund Recovery Penalty also is known as the 100% penalty. Not only would the trust fund have to be paid in total, there would be a staggering amount owed due to the Trust Fund Recovery Penalty plus the resulting interest. As time passed, the vigilant IRS Revenue Officers discovered the discrepancy and came after the San Diego company with a vengeance. As the largest collection agency in the world, the IRS never forgets. Sooner or later, if you have unpaid payroll taxes, the IRS will catch you and will prosecute to the fullest extent of the law.

Luckily, before the problem led to the San Diego general contractor being forced to close their doors and add to the unemployment rolls, the principals came to the Tax Resolution Institute. Although the payroll tax debt owed to the Internal Revenue Service was well into five figures (we cannot be specific because TRI always protects the anonymity and privacy of our clients), the tax experts at the Tax Resolution Institute were able to use their experience and expertise to work out a viable and beneficial deal for the San Diego general contractor. The Trust Fund Recovery Penalty did not end up destroying the future of the company.

In the end, the general contractor survived the payroll tax crisis with the ability to keep their doors open. As a result, their workers are continuing to build today, helping keep the revival of the California economy moving forward and renewing the prosperity of the San Diego business world. If your company has unpaid payroll taxes and is in a payroll tax crisis with the IRS, please contact the Tax Resolution Institute so you can maintain your future productivity and profitability.

Payroll Taxes In California (1099 vs. W2): IRS Payroll Tax Consequences of Tax Misclassification

In a challenging economy, the Tax Resolution Institute has seen companies attempt to cut costs by choosing to distinguish workers as 1099 independent contractors instead of W2 employees. If IRS and state guidelines are not followed, however, business owners can find themselves in a world of trouble. As a result, since Payroll Tax Problems can be so extreme, the Tax Resolution Institute wants to help you clarify this situation. We will provide you with the information you need to make the right decision that will help you avoid the payroll tax problems of misclassification.

The Payroll Tax Choice — W2 vs. 1099

The Payroll Tax Choice — W2 vs. 1099

The choice between 1099 and W2 determines whether an individual is an independent contractor or an official employee. 1099 indicates Independent Contractor (IC) status, meaning that a business has less liability for the contractor’s acts and less ability to control how the work is done. W2 indicates “employment” status. As a result, a company can determine the time/methods/means by which work is executed. In addition, your company has greater liability for a worker’s actions and potential negligence. But it must be done correctly or serious unpaid payroll tax problems can arise to hurt your business.

This type of misclassification is one of the most contested payroll tax issues that businesses consistently have with the IRS. While you might like the simplicity of the independent contractor status for your employees, if they really are your employees, you are required to put them on payroll, giving them a Form W2 at the end of the year. Misclassifying an employee is the same as not paying your payroll taxes and is considered a serious offense by the Internal Revenue Service and the California Employment Development Department.

It is important to classify a worker as either an employee or an independent contractor (1099) to avoid IRS penalties for not properly withholding and paying FICA and payroll taxes. The IRS takes extreme action against employers whom they catch avoiding unemployment taxes and delaying tax collection. Additionally, California has hardcore rules as to when employers must pay into state unemployment funds and carry workers compensation coverage.

When done improperly, misclassifying workers as independent contractors can lead to serious problems and consequences. If the individual really is doing the work of an employee, the Internal Revenue Service or the California Employment Development Department might reclassify the individual as an employee, erasing the presumed financial benefits. In addition, your company will be charged interest and penalties. If you are caught willfully avoiding payroll taxes, criminal charges and the 100% trust fund recovery penalty can come into play as well.

Caution — The IRS Is Watching You!

Caution — The IRS Is Watching You!

TRI believes  most important issues to consider are “Degrees of Control”, and who dictates when where and how? Does the employer direct and control how the work is done? Are instructions provided and is training given? These questions help to define degrees of control. Employees are subject to instructions and rules about when, where and how they work while an independent contractor generally is free of such restrictions.

The tax and additional consequences of misclassifying an employee as an independent contactor are costly and can also include paying both the employer and employee’s share of Medicare and Social Security, paying federal income taxes and state income taxes that should have been withheld, and paying federal and state unemployment benefits. All of these payments do not include the possible interest and penalties mentioned above. Unpaid payroll taxes are a serious problem.

If you want to treat an individual as an independent contractor rather than employee, structure the relationship appropriately. We can help your company avoid payroll tax problems with the IRS and  payroll tax problems with the California Employment Development Department. In this recessionary economy, there is no reason to make tough times worse by mismanaging this essential part of tax planning.

If your company is in trouble when it comes to your unpaid payroll tax payments and you need help, contact the tax experts at the Tax Resolution Institute today.