by Marty Griffith , Senior Tax Consultant
October 6, 2014

There are a number of ways to resolve a 941 tax debt that your business has fell behind on: Offer in Compromise, Payment Plan and Penalty Abatement - even Currently Not Collectible is an option. BUT the most neglected option is simple: dissolving your business entity and starting over.

If you are a corporation, partnership or LLC, dissolving your entity - is almost an automatic 55% reduction in the debt and in some cases a 100% reduction. The only debt that will survive a Business entity's closure is the Trust fund portion of the 941 taxes. And these taxes have to be ASSESSED by the IRS against you. If they don't get assessed, you also have a chance of NOT PAYING ANYTHING if three years pass after the tax is due.

So - why isn't dissolution the topic of tax professionals or company's that cold call tax liens to offer tax representation services? In our opinion, we think it isn't an option in their sales pitch because they might not be inclined to charge as much to do it? Or perhaps they might feel the business themselves can manage the dissolution without them?

Washington Tax Services has an entirely different approach. We believe Dissolution should be given as much consideration as Offer in Compromise or Penalty Abatement. Remember: dissolution is almost an automatic 55% discount of the tax and you don't have to go thru months of paperwork battles to achieve the result.

A couple of caveats on dissolution:

1. If you do dissolve your entity and start a new entity - we strongly encourage you to stay current on taxes - the IRS can prosecute you for pyramiding if you are perceived as someone who opens and closes businesses repeatedly to avoid paying taxes.

2. When you do dissolve - the assets of the business are "in-play" essentially in the dissolution process . We may need to disclose their auction value to the IRS or at the very least document the value of assets to be safe if the IRS scrutinizes a past dissolution in the future.

Has your business fallen behind on 941 taxes? Let's discuss every option under the sun - including dissolution. Call the Tax Resolution Experts at watax.com - 1-888-282-4697
or EMAIL us HERE and we'll contact you!

Posted In
Registered members of the National Association of Enrolled Agents.

Call and talk with a tax expert for free:
(888) 282-4697

or email us now