Resolving Your Back Taxes Without Talking to the IRS
Imagine picking up the phone, calling the IRS and telling them you have not paid taxes for a few years. In a poll of the scariest scenes from movies, that has to rank right up there with the stomach scene from Alien and so on. Truth be told, most people will put it off for as long as possible. Many will just stick their head in the sand and hope nothing ever comes of it.
The IRS realizes it has a big, bad reputation. It likes it. If people thought the IRS was friendly, how motivated would they be to actually pay their taxes? Not very! While the IRS likes to maintain this reputation, it does have a backlash impact. Taxpayers that get behind on their tax payments often do not move to resolve things because they fear the IRS ripping them apart if they act. This, of course, means the back taxes don't get paid until the IRS takes action. It costs the IRS man hours it doesn't have and puts otherwise law abiding citizens in a worse situation. After years of contemplating this situation, the IRS has come up with a possible answer.
If you owe back taxes to Uncle Sam, it is critical that you take voluntary action to resolve the problem. The IRS takes a much different view towards those who come forward versus those that hide. The IRS even has instituted payment plan programs to help voluntary reporters resolve their issue and get back into the system. The problem with these programs, however, was most taxpayers feared calling the IRS so much that they didn't take advantage of them.
The IRS has now implemented a new online system for people that owe back taxes. Instead of speaking with an IRS agent, you can now go online and fill out an application for a payment plan to resolve your back taxes. To use the system, you must have filed all relevant tax returns, even if you couldn't pay the actual tax. If you have not done this, you need to before applying online. Once you have the returns in, you will need to wait for a balance due notice from the IRS. You then go online and apply. You will need the balance due, your social security number, and a pin number that is on the balance due notice.
This new program is a very smart move by the IRS. Imagine resolving your tax problems without every talking to anyone at the agency! To access the program, just go to the IRS site.
Depositing Employment Taxes
To pay employment taxes, you must deposit the money with the IRS. As is typical with tax situations, the payments are not actually made to the IRS. Instead, you must deposit the employment taxes with a federal depository. Moving the burden to the private sector, the IRS requires most banks to act as depositories. If your business has just started hiring employees, ask you bank if they act as a depository. If they do not, you may want to change banks.
To deposit the taxes, you forward money per the bank specifications. You will also need to file a Federal Tax Deposit Coupon, Form 8109, with the deposit. The IRS typically sends these forms to you at the beginning of each calendar year. If you don't receive any, you can download the form from the IRS site or ask your tax professional.
When To Deposit
You must deposit employment taxes either once or twice a month. The IRS will send you a schedule at the end of each year for the subsequent year. As a general rule, you want to file within a few days of each pay period.
Failure To Deposit
Collecting employment taxes is a high priority of the IRS. Since the taxes include money deducted from an employee's paycheck, the IRS views an employer's non-payment as a form of theft. If you fail to pay, you can expect the IRS to come down hard on your business and, potentially, shut it down. In short, make absolutely sure you deposit the employment taxes.
In Closing
There is no other way to put it ? paying employment taxes is a pain. Just make sure you pay them to avoid a nasty audit by the IRS.
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