How Taxpayers Get in Trouble When Closing Their Businesses

When it comes time to wind down your business, you likely face a lengthy checklist of tasks and responsibilities. It is important not to neglect your obligations to the Internal Revenue Service. There are many potential traps for the unwary when it comes to the tax responsibilities of closing down a business. Failing to fulfill these responsibilities can result in costly penalties and fees.

14 Ways Taxpayers Can Create IRS Tax Problems When Closing a Business

What are some of the ways business owners can find themselves facing IRS tax problems after closing a business? Failing to do the following can result in serious consequences:

  1. Make final federal tax deposits
  2. File your final quarterly or annual employment tax forms
  3. Issue final wage and withholding information to employees
  4. Report information from the W-2s that were issued
  5. File final tip income and an allocated tips information return
  6. Report capital gains or losses
  7. Report a partner’s or shareholder’s share of income, credits, and deductions
  8. File an annual report of an employee pension or benefit plan
  9. Issue payment information to sub-contractors
  10. Report information from the 1099s that were issued
  11. Report the corporate dissolution or liquidation
  12. Address your S-corporation election
  13. Report business asset sale
  14. Report the sale or exchange of property used in your trade or business

If you closed a business and are now facing issues with the IRS, it is important to seek legal guidance. We can help you find a solution to your problems. Learn more about the experiences of our past clients by checking out our client testimonials today.

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