Need cash? Don’t borrow from the IRS!

Many businesses and individuals are experiencing cash flow difficulties in today’s economy. To ease the cash crunch, it may be tempting to delay payment of taxes in the hope that finances will improve soon. Unlike other creditors, the IRS moves relatively slowly, lulling the taxpayer into complacency. During this time, interest and penalties accrue which, in some situations, can even exceed the original tax due. When the IRS decides to act, they often file liens, levies, and other garnishments that can cause significant and sometimes permanent economic damage. In addition to these civil penalties and collection actions, the IRS can pursue criminal charges. The failure to truthfully account for or turn over taxes is a felony, with the potential of up to five years of jail time. This applies to all taxes under the Internal Revenue Code – income tax, payroll tax, gift tax, and excise tax, to name a few.

If you find yourself owing the IRS, or having unfiled or erroneous tax returns, the time to act is now. The IRS continues to step up collection enforcement on existing debts, and is getting very creative and resourceful at uncovering transactions that have been underreported or not reported at all. We can help you resolve any tax compliance or controversy issues you may have. Please contact Laurence C. Rubin, CPA, Aronson’s Tax Controversy Practice Leader, at 301.222.8212 to confidentially discuss your situation and the solutions available.