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Personal Financial Information and Your Business Payroll Tax Debt

M&M has provided tax debt relief services for hundreds of businesses nationwide.  A common surprise for our small business clients is that we ask them to provide us with personal financial information to resolve their business tax debt.  Naturally, this creates apprehension because the IRS can collect a portion of a business payroll tax debt from business owners or other Responsible Individuals.

IRS Form 433-A

If you are resolving your own business payroll tax debt, be prepared to provide personal financial information on IRS form 433-A.  This form and backup documentation are usually required to secure a business Installment Agreement.  The IRS requires this form for several reasons, most notably that the Service is sizing you up as a collection target, and is looking for additional information as to the workings of your business.  Form 433-A, allows the Service to:
  • Determine if the business owner and business are commingling funds,
  • Determine whether the business owner is taking reasonable compensation from the business,
  • Determine whether the business owner may have equity in assets to pay the Trust Fund portion of the payroll tax debt and avoid a personal tax lien.
Many business owners resist giving their personal information to the IRS.  In some cases, this can be a recipe for disaster, including bank account levies, accounts receivable levies, unnecessary personal civil penalty assessments, and more.  And if the IRS really wants to know more about your financial situation, they probably just need to look at the information you’ve already given them over the years, or by looking at State and County records.  

 Remember, be forthcoming with the IRS while attempting to resolve your tax debt.  If you need help from a seasoned expert, contact M&M Financial.  We provide real solutions to difficult tax debt problems for our clients all over the country.


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