1. What's the consequence if I don't pay this $2.4k. This might not be much to most small businesses but the business has been terrible since 2014 for me and $2.4k is quite significant to me. From what I understand, if i don't pay the interests and penalties will keep piling up. My question is will IRS take action to collect on my business bank account for such a small amount? ==>Possibly; If you filed a return but didn?t send the IRS what you owed, you?ll be hit with a late payment penalty, plus the interest on your outstanding tax bill itself, which is the current federal short-term interest rate plus 3%Generally, the IRS won?t hit you with a lien unless you?re delinquent for years, but a lien is a huge headache. Officially, ?The federal tax lien is a legal claim to your property, including property that you acquire after the lien arisesUnlike other debts, which eventually drop from your credit report even if you don?t pay them, that lien will stay on your report indefinitely as long as it?s outstanding. If you settle with the IRS for less than what you owe, it will stay on your credit report for 7 years,
2. Is there any way to negotiate it down a bit so that I pay a certain percentage of that amount to settle it with IRS? >Yes; If you can?t pay the taxes you owe, the IRS has payment options available. Which option might work for you generally depends on how much you owe and your current financial situation. By taking action as soon as possible, you?ll help ease the burden and keep the IRS from acting to collect the debtYou can ask for an Installment Agreement, which sets up a fixed monthly payment. This is a formal agreement with the IRS, and involves an application process and some fees. The IRS understands there may be times when someone can?t pay a tax debt due to their current financial situation. If the IRS agrees that you can?t pay your taxes and also pay your reasonable living expenses, it may place your account in a status called Currently Not Collectible. The IRS will not seek to collect payment from you while your account is in Currently Not Collectible status, but the debt does not go away, and penalties and interest will continue to grow.you may contact IRS taxpayer advocate service for more help.
3. Will this likely to trigger an audit? I mean I'm not hiding anything but if there's an audit I have to gather all the receipts and paperwork which could be very burdensome. => I do not think so; |