Rental companies often find themselves in cash crunches when business becomes difficult, often leading to payroll tax problems and the need for tax resolution help. Since the film and television industries are based in Los Angeles, a major business for many decades has been the rental of camera, grip and lighting equipment for independent productions. Such companies seem to often experience payroll tax problems.
Working with Unit Production Managers, a major production ren tal company located in the San Fernando Valley rents out millions of dollars worth of equipment to independent productions every year. In the last year, when several production entities moved their business out of state due to the rising costs of shooting in Los Angeles, the rental company found themselves in trouble. With the economy taking a downturn and capital wrapped up in their inventory, what could they do?
The old adage – when it rains, it pours – unfortunately seems to become a negative reality in business. When the rental company was facing this financial crisis, they had a bevy of equipment stolen from them by a questionable client. Although the equipment was covered under their insurance, it raised their rates and led to expensive legal fees as well.
Suddenly unable to cover their basic costs, the owners made the mistake of dipping their hands in the trust fund portion of their payroll taxes taken from the paychecks of employees. Believing they would be able to cover the difference in the coming months, they decided to steal from Peter to pay Paul and not pay their IRS payroll taxes. Peter, however, is the IRS, and the Internal Revenue Service takes payroll tax problems very seriously. In fact, they have hired many new regional Revenue Officers to go after delinquent payroll tax accounts. After all, the trust fund recovery penalty is called the 100% penalty because the federal government does not appreciate their trust fund being violated by business owners.
When an IRS Revenue Officer contacted the business owners, they realized that they had made a grave mistake. Wanting to keep their doors open, believing that the former prosperity of their business was just on the horizon, the owners contacted Peter Stephan and the Tax Experts at the Tax Resolution Institute. Examining the case against them, Peter Stephan came up with a strategy to keep the business viable. After all, in these tough economic times, the IRS wants businesses with a track record of success to keep their doors open as well. You can’t collect an unpaid payroll tax debt from a business that is forever closed. As a result, the IRS often is willing to negotiate a positive Installment Agreement or Offer in Compromise to cover a payroll tax debt.
Cutting down both the interest and the penalties, Peter Stephan was able to negotiate with the IRS Revenue Officer an Installment Agreement for the Camera, Grip and Lighting Equipment Rental Company that provided real tax resolution to their unpaid payroll tax crisis. If you own a business in Los Angeles, the San Fernando Valley or any other part of Southern California and you need help with a payroll tax problem, contact the Tax Resolution Institute. Our goal is to keep your doors open by finding a workable solution to your unpaid payroll taxes.
About Peter Y. Stephan
Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.