How to move forward from business tax issues
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Keeping up to date with taxes and running an operation smoothly can be a challenge, especially when an operation runs into tax trouble, but businesses can recover as well as change their practices to safeguard against further business tax issues in the future.
According to the Internal Revenue Service, a large portion of tax problems comes from simple mistakes such as bad bookkeeping. Using company credit cards for personal expenses and not keeping track of transactions and expenses is a common issue, as well as failing to properly document workers (particularly when hiring independent contractors as well as full-time and part-time employees), not having appropriate insurance, and failing to meet certain health and safety standards.
Of course, the answer to these problems is to implement a system within the business that can prevent them from happening in the first place, whether it is through hiring an accountant, a payroll provider, or handling queries in-house. But what happens to businesses that have encountered tax trouble and are struggling to recover?
A slow process
Many businesses that have experienced tax problems are up against a lot of pressure. There is often a long recovery process as well as having to stretch resources to try and get the business itself back on track. However, that doesn’t mean that companies can’t get back to where they were pre-tax trouble.
Businesses need to sustain an effective relationship with the IRS as a first step to resolving their tax issues. This means maintaining regular correspondence and letting the IRS know the current situation of the business as well as making regular payments. If regular payments cannot be made, the IRS can often negotiate a payment plan that will put less pressure on the business and its respective budget, and in some cases offer discounts. When businesses cooperate and demonstrate a willingness to control the situation, then the IRS will reciprocate; if businesses choose to ignore the problem, then the IRS will inevitably return.
Other options include filing for bankruptcy, though not all businesses may wish to go down that route, understandably. A business should consider hiring the services of an experienced law firm to help devise a plan that will not only resolve tax issues but also help the business recover over a period of time. Law firms operating on both an international and local level are able to steer businesses in the right direction.
DLA Piper – a successful firm that has flourished under the guidance of COO Bob Bratt – specializes in helping businesses not only overcome financial challenges but also place in motion long-term plans that increase their likelihood of success. As Bob Bratt’s profile suggests, experience and commitment in the industry is what helps firms such as DLA Piper to succeed on the local and international level as well as contribute to the economy by helping other businesses get back on their feet.
While it may seem like an uphill struggle, with the right guidance, time, and effort, businesses can recover from tax trouble. Managing internal affairs effectively, maintaining a good relationship with people who understand, and drawing on the expertise of people who deal in the legal side can set a business back on the right path.