While the federal government and, possibly, the state may present relaxed rules and requirements for payment plans on taxes due, the requirements for local authorities could be much more stringent. For a small business that runs into trouble affording past due taxes, working with a skilled small business accountant to set up a payment plan without any undue burdens or hassles.
Booms Followed by Busts
Sometimes, the need for a payment plan arises unexpectedly and catches a business owner off guard.
A small business might experience record profits from January to August of one year and then suffer massive declines from September to well into April of the next year. The trouble here is the small business now lacks the capital to pay the tax due to the local authorities. Not filing a return is a really bad idea due to the massive penalties that can be incurred. Filing a return and setting up a payment plan is the far better strategy.
However, someone who is not versed in local tax law might discover payment plans come with onerous requirements such as meeting with a revenue agent and "pleading your case" face-to-face. Instead of dealing with these situations, turn the task over to an accountant who is capable of effectively representing you.
Dealing with an Interview
Business owners not familiar with the in-person interview process might end up being intimidated and not even bother. Others end up stumbling through the interview, doing poorly, and end up being turned down.
A professional accountant knows how to handle stressful interviews and is not likely to be intimidated. The professionalism of the accountant ensures he/she brings all the necessary documentation and properly fills out all mandated forms. As a result, the chances of being approved for a payment plan increase.
Approving Penalty Waivers
Just because a payment plan is approved does not mean penalties and interest are automatically waived. In hardship situations, the possibility does exist that some of the additional fees might be waived. Having a very good reason and, more importantly, clearly detailing the reason and circumstances in writing is going to factor heavily into an approval or denial of the waiver.
An account is never going to be able to guarantee and outcome, but he/she can eliminate common errors or omissions that could potentially ruin a positive result. Having your account draft the letter requesting a waiver is far better than stumbling through the process on your own. To learn more, contact a company like Teri J Henderson, CPA, P.A. with any questions or concerns you have.