We own an S Corp and closing, can't afford to pay taxes due.?

Question

We are an S Corp and are closing. We owe some money for payroll taxes (about $800) and about $800 for sales taxes. We are financially strapped and cannot afford to pay those, what happens if we cannot pay them after we close?

Answer 1

you'll get a bill and if not paid on time,interest and penalties will be added- they could garnish future wages and/or intercept federal tax refunds- They will work with you on a payment plan

Answer 2

If you have already withheld employee's taxes from them but not forwarded them to the Treasury, make it the number one priority of your life to get those paid - before your rent or light bill even.  Owing most taxes is usually not a big thing - you can work out installments that will let you pay them as you can with penalty and interest.  But when you have taken money from employees as agents of the government, and not forwarded them in a timely fashion, there are special penalties including criminal ones.  Borrow from a bank, pay them with a credit card, get a home equity loan, anything to pay those payroll taxes.  Then you can get to work on the sales tax and other taxes in your leisure.

Answer 3

Contact the IRS immediately. They particularly frown on unpaid payroll taxes, but you can easily setup a payment arrangement.

Answer 4

the tax man cometh to see YOU

Answer 5

Dissolving the S-corp does not make the tax debts go away.

The payroll taxes may be assessed on anyone connected with the S-corp, both shareholders and employees.  The penalty for not paying these taxes is 100%.  It will not go away, the IRS is going to pursue this vigorously.

The sales tax is a state or local matter and will vary as to who is going to be liable for these taxes.

Answer 6

File the returns and IRS and your state tax agency will send you a bill. The amount of money owed is not going to put your account at the top of the stack.