Is it possible to resolve my outstanding payroll tax liability for less than what I owe and keep my business open?

On: April 19, 2019

NO! … but there are options. If you want to keep the business open and not make any changes whatsoever, you have to either pay in full or enter into an installment agreement. The IRS can and will work with you as long as the payment arrangements can pay off the IRS as quickly as possible. This is not a bad idea in light of the continuing interest and penalties accruing to the account. If you want to settle an outstanding tax liability based unpaid payroll taxes for less than what is owed, it is now time to strongly consider hiring a tax professional. A tax attorney is best for this type of work as it entails a mix of tax based insolvency, restructuring, corporate/entity formation law, revenue/expense stream transfer and negotiations with the IRS. It involves the opening of a new entity, the transferring of business and revenue streams from the old business to the new business, the closing of the old business, the hiring of you by the new business entity, the assessing of Trust Fund Recovery Penalties against you and social security number as the controller of the old payroll account and an eventual Offer in Compromise based on your new income/expense profile after the above actions. It is a long and arduous process with great rewards in the end for the person who fits the right profile. Get an attorney to help you do this.