| While businesses still not picking up, even to small | | | | merits it, such as liquidity. |
| businesses, it is not a surprise to see business owners | | | | Technicalities on how long tax due has been unpaid |
| wanting negotiations with IRS. This business owner | | | | will, however, deter tax payers' hope for tax relief. |
| might be deep in tax debt to IRS. That even if he sold | | | | According to the tax codes, if there are taxes unpaid |
| his business, it would not break-even to settle it. This | | | | for three years, this must be settled fully. And any tax |
| business owner may just be praying right now for a | | | | obligations thereafter are the ones to be subjected to |
| tax debt relief. | | | | relief proceedings. |
| Bankruptcy, whether personal or business, can be | | | | On the other hand, business owner can't use tax debt |
| used as a reason to ask for tax relief. What business | | | | relief as a means to escape from paying local taxes. It |
| owner will do is show latest financial and income | | | | is because local tax debts cannot be used against |
| statements that proved that his business is in peril. This | | | | declaration of bankruptcy. Instead, this must be paid in |
| means that at this point his capacity to settle tax debts | | | | full before debts on federal business income tax can |
| is nil. IRS in turn will consider this, and might allow a | | | | reach a settlement. |
| relief. | | | | Compliance of the business owner to settle with local |
| This business owner may propose to IRS an "offer in | | | | tax codes is eminent among IRS, lest relief isn't |
| compromise". This is a settlement that may grant | | | | granted. In other words, bankruptcy cannot be relied |
| reduction of a taxpayer's amount of tax due. | | | | solely as a way to escape paying for taxes. It is |
| Alternatively, it can help decrease abatement of tax | | | | because there are non negotiable tax debts that must |
| penalties, but the taxpayer has to pay the full amount | | | | be settled first. So if one doesn't want to be in this |
| in staggered payments. Alternatively, tax dues can be | | | | situation, he should always abide state and federal |
| totally wiped out if the situation of the business really | | | | laws on taxes. |