Business winds down, payments slow up and cash flow barely exists. To compensate, you delay paying Uncle Sam.
Before you know, the IRS is knocking on your door, assessing fines, fees and interest. You know you owe. You’ve checked that, but what do you do when you haven’t got the money?
Don’t panic! The IRS isn’t going to send a SWAT Team to kick down your door and drag you away. However, this also doesn’t mean you should ignore them. If you know what you will owe them before you file, go ahead and file your return as soon as possible. If you fail to file, it adds a 5% per month non-filing fee that increases by 5% up to 25% for each additional month you don’t file.
The IRS will accept a written request for extended payment time, up to 45 days, if you request it in writing. However, this is a temporary window, and you need to come up with a strategy, payment or something.
Let's talk about that.
I am not a proponent of trying to deal with the IRS by yourself. I recommend having a CPA or tax attorney do it for you. The reason is simply. Go to a casino and the odds are always in the best interest of the house. The same applies here.
With that thought in mind, I suggest a CPA, Tax Attorney or a qualified tax resolution official. They have the expertise and knowledge to negotiate you a better deal than you can yourself, and possibly get a reduction in the amount you owe.
The important thing is to take action coupled with a strategy and professional help.