Can The IRS Take My Business?

"Can the IRS take my business?" is a question that we often hear. The simple answer is that it is rare for the IRS to shut down a business. The simple truth is that shuttering businesses is not good policy, because the IRS generally cannot hope to collect the back taxes if your doors shut. BUT, that doesn't mean that the IRS won't take significant steps to obtain owed back taxes from a business that falls behind on its tax obligations.

How do these problems start? When cash flow is tight you may not be able to pay quarterly estimated tax payments. If it goes on for a couple years, it may be impossible to catch up.

How Do You Prevent The IRS From Closing You Down?

If you are worried that the IRS is about to step in, you cannot bury your head in the sand. Those are the cases when the IRS shuts down businesses.

First, make sure that your company has filed all required tax return. It is easy to ask for the six-month extension and still not have time to deal with taxes in October. If you have unfiled tax returns, get them completed and filed as soon as possible.

Prioritize current and future tax payments to show good faith. This also prevents you from getting even farther behind.

Then, cooperate with an assigned agent. Their job is to collect those back taxes and they have many cases. Meet assigned deadlines and participate in negotiations on repayment options. If you make their job more difficult, it can make your situation even worse.

Is Any Business Property Safe?

Yes, the law protects a minimal amount of business assets - about $5,000. If you have a small business with simple office furnishings or equipment of nominal value, the IRS probably cannot take it.

For the IRS to seize business property, it must have equity. If a business property is worth about what you owe on it, the IRS has little interest in seizing it. And generally, the IRS must have a warrant to enter facilities to seize business assets.

Take The Threats Seriously

If the IRS threatens to shut you down, it has various tools at its disposal. They may not include taking your business, but you may not be able to run the business without expensive pieces of equipment that can be seized.

By sending a message to our experienced tax attorneys, you can often keep the company intact. Communicating and negotiating with IRS agents is not always easy. We will explain what the Service can do and what it cannot, then based on your goals we will help you down a path forward.