Educational overview
Business tax problems can threaten cash flow, bank accounts, receivables, vendor relationships, ownership interests, and the individuals responsible for tax compliance. Immediate decisions should be based on entity type, tax type, notice, current operations, and whether the business can remain compliant going forward.
Payroll and employment taxes
Employment-tax liabilities can include withheld trust-fund amounts, employer taxes, deposit penalties, unfiled Forms 941 or 940, and responsible-person investigations.
Using current payroll withholding to pay ordinary operating expenses can deepen the problem and may create personal-exposure issues.
Sales and use tax
New Jersey sales-tax matters may involve registration, returns, collected but unpaid tax, audits, assessments, responsible-person issues, and collection.
The treatment of collected trust taxes can differ from ordinary income-tax debt.
Business income-tax and filing issues
Corporations, partnerships, limited liability companies, and sole proprietors can have different return obligations and relationships between entity and owner liabilities.
Accurate books and records are essential when reconstructing returns, challenging assessments, or presenting financial information.
Operational feasibility
A resolution plan should consider whether the business can make current deposits, file current returns, pay ordinary expenses, and fund any proposed past-due arrangement.
A payment plan that depends on unrealistic projections can default and expose the business to renewed collection.
Information that may be relevant to an initial review
- Entity formation and ownership records
- Federal and New Jersey tax notices
- Payroll returns and deposit history
- Sales-tax returns and records
- Business income-tax returns
- Profit-and-loss statements and balance sheets
- Bank statements and accounts receivable
- Loans, equipment, vehicles, and real estate
- Prior collection communications
Frequently asked questions
Can business tax debt become personal debt?
In some situations, responsible individuals may be assessed personally for certain trust-fund or responsible-person liabilities. Entity type and tax type matter.
Can the IRS levy business receivables?
The IRS may levy certain property and rights to property, including receivables, subject to law and procedure.
Can a business obtain an installment agreement?
Possibly. Requirements depend on the agency, tax type, amount, compliance, financial information, and business viability.
Should the business stop current deposits to pay old debt?
That approach can create new liabilities and undermine a resolution. Current compliance should be addressed promptly.
Official government resources
Government pages and forms may change. Review the current instructions that apply to your matter.
This page provides general information and is not legal or tax advice. Reading it or contacting the office does not create an attorney-client relationship.