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How CP&A Slashed a Client’s Tax Bill by 85 Percent While Increasing Capital by Over 300 Percent

Date: March 9, 2021

Overview

An Idaho-based bathroom and tile refinishing company had fallen severely behind in paying its payroll and income taxes. Not only did the business owe more than $120,000 in unpaid payroll taxes, but as a result of the firm’s oversight, the IRS was attempting to levy the firm’s property. Making a difficult situation worse, the firm faced acute cash flow issues and was struggling to get caught up. 

Challenge

Falling behind on paying taxes is no joke and can have serious consequences, including seizure of assets and business closure. Unfortunately, that’s exactly what one bathroom and tile refinishing company in Idaho faced when they called CP&A for help. The firm had major cash flow issues and had failed to pay its payroll and income taxes for some time. As a result, the IRS was threatening to put a lien on the business owner’s personal assets which would ultimately lead to property seizure and the business’ demise if the tax bill wasn’t settled. The business owners were concerned about making the small monthly payment that they could afford and leaving their tax debt to their child. 

Taking Action

Although the client’s situation was dire, our tax resolution specialist took swift actions to tackle this challenging case. Working with a retired IRS agent, our specialist fully understood both the IRS’ processes and our client’s rights and worked to develop a relationship with the IRS officer in charge of the client’s case. We first focused on ensuring that all documentation was provided in a clear and concise manner, eliminating a significant amount of back and forth with the IRS. With that out of the way, we set our sights on negotiating the tax bill on the client’s behalf. 

Our approach included a number of negotiation strategies, but the key to winning tax relief for this client was to illustrate that paying the full debt would place an undue hardship on the business owner, which would in turn prevent them from having a meaningful life and acquiring retirement assets.

Results

As a result of our negotiations, the IRS agreed to reduce the client’s backed tax bill to less than $18,000, a whopping 85 percent reduction. We also negotiated the removal of the client’s ongoing monthly tax payments, freeing up additional resources to be used in growing their business. 

Most importantly, though, we worked with the client to implement a set of processes and systems to avoid future mistakes. This not only ensured the client remained tax compliant, but also increased on-hand capital by 300 percent. Once the business had the resources it needed to keep growing, the owners could focus on saving for retirement and leaving a legacy for their child.

Ultimately, our work helped protect the client’s business and family assets, not only saving the business from closure but setting them up for future success. 

Before we engaged CP & A, we were truly worried about losing everything and felt so stressed out, all of the time. Their diligence and commitment to helping us find relief was remarkable, and we are extremely grateful for their hard work. Vanessa went above and beyond to protect our business and give us some much-needed peace of mind. 

    —Business Owner

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