Launching a small business is exciting, but things can take a wrong turn when the owners fail to fulfill their federal tax obligations. When this happens, small business owners are likely to see their assets put on a tax lien by the government. Fortunately, it’s not too late to resolve this issue. Here are ways to deal with tax liens:
File for bankruptcy.
The main intention of the Internal Revenue Service (IRS) for putting assets on a tax lien is to see to it that debts are paid properly. Still, it’s not an option that everyone is capable of, especially if the business has gone down under. As such, filing for bankruptcy may be considered as an option.
It must be stressed that a bankruptcy doesn’t erase a tax lien from public records. It’s likely that credit reporting agencies will get a hold of this, affecting one’s credit score even more. The upside to filing for bankruptcy is that the IRS won’t have the right to garnish wages, take other assets such as checking or savings accounts, or get newly acquired properties.
Offer partial payment.
For the IRS to allow them to pay debts in increments, small business owners have to first prove how paying a full amount may result in financial difficulties that they can’t endure. In this case, it pays to have tax resolution specialists to convince the IRS to agree.