Hard Work: Times are tough. The price of everything is going up and business is going down. This is a tempting time to pocket cash that should go to the IRS. But watch out! No matter what, people are going to need to get their cars fixed. The IRS knows this, and watches self-employed mechanic shops closely. Don’t get greedy! Stay sharp, and learn how to prevent and get rid of IRS Debt.

IRS Debt Prevention

Pay Your Dues: The IRS wants their cut. So make sure you pay Uncle Sam before anyone else. Even if you owe other creditors, pay the IRS first. The IRS has the power to seize your business’s assets and even shut you down if you don’t cooperate with them.

Classifying Workers: Making the distinction between Employees and Independent Contractors is tricky when you own a Body Shop. But it’s extremely important you classify them right. You may have to pay up to 35% of what you paid to the wrongly classified worker, plus interest. That’s on top of the payroll taxes that are still due. Here are some workers that are always classified as employees no matter what:

-At-Home Workers that you supply materials and work specifications

-Food and Laundry Drivers

-Full-time salespeople

-Full-time life insurance agents working mainly for one company

Tall Tales: Tax Deductions are not the place to get ambitious. Many small business owners think they can get away with claiming personal expenditure as business expenditure. But you won’t. This is classified as Tax Fraud by the IRS.

Cold Hard Cash: Another dangerous temptation is all that floating money. Many mechanics deal with big amounts of cash. But don’t put the excess in the bank and forget to let the IRS know about it. If the IRS suspects you of this, they will calculate the amount of deposits in your bank versus the amount your reported as income. If the amount exceeds your reported income, your account will be sent to the IRS’s Criminal Investigations Division. And like the name suggests, that’s a bad place for it to end up!

Methods of Escape:

Appeal: If the IRS suspects you of payroll tax evasion, you’ll get a notice. You’ll have 60 days from when you receive the notice to file an appeal. So act fast! File a written protest with the appeal office. If you don’t protest within the 60 days, the IRS will send out a formal notice of payment due!

Friendly Advice: Appealing will buy you some time. You can file one even if you are clearly responsible for the debt. This will keep the IRS from knocking at your door and give you a chance to seek professional help if you need it.

Now You Have The Smoking Gun…Use It!

Richard Close was an IRS-Hitman. He worked as a revenue officer for the IRS and his father was the head of the collections branch for 30 years; so it runs in the family. He left that behind and now he’s partnered with Tax Defense Network to help thousands of Americans with their tax problems. He gives the tips and tricks for you to fight the IRS and win! Visit him at: http://irs-hitman.blogspot.com or http://www.taxdefensenetwork.com, or contact: email irs-hitman@taxdefensenetwork.com or 1-888-248-9058.