Let me tell you how it will be
There’s one for you, nineteen for me
Cos I’m the taxman, yeah, I’m the taxman
The Fab Four found out first hand the pitfalls of not paying taxes. You can’t mess with your taxes and failure to know the rules is officially not an excuse. Whether it’s incorrectly classifying who is working for you or failing to pay what is owed on time, the IRS will find out and attempt to collect what is due. Delinquent tax issues have a ripple effect. They can severely impair your ability to qualify for commercial financing.
The first thing to consider when there isn’t enough money to pay taxes is; whether the business is viable and undercapitalized. A good accountant should be able to calculate the profitability of the business and what steps should be taken to insure that tax payment can be made in a timely fashion. It makes no sense not having access to good advice when in the long run it will cost much more to fix a problem.
As a factoring company we see too many instances of companies realizing too late that unpaid taxes put a roadblock on borrowing working capital. The factor cannot provide invoice financing until the IRS is onboard with the funding. They do this in the form of permission (a subordination) that will be easy to get if you are working closely to fix the indebtedness. But if the debt has been going on for years and little has been done to alleviate the situation, there is little a lender can do to help.
So the best advice is, recognize the issue early and deal with it quickly because the problem won’t fix itself.