Notice of Tax Lien: A Desperate S.O.S. Signal for Rescue

Notice of Tax Lien: A Desperate S.O.S. Signal for Rescue

Most failed businesses, up to 60%, say that all or most of their failure was due to cash flow.

Most small businesses can be taken back to profitability. It is all so simple that it pains to hear that small businesses with great potential go down when they could easily be saved.

Cash flow is by far the best indicator of company's financial health. It is the fuel or the lifeblood of a business establishment. Blood pressure instrument warns a patient why it is time to see a doctor. Likewise, the most crucial for a company is the insolvency test, which looks at whether a company can pay its liabilities as, and when they fall due where late payment of creditors indicates that, a company is suffering cash flow problems.

Warning signs?

Elementary: If a company cannot take advantage of trade discounts, then the financial health indicator tells that the company is not a super athlete performer simply not a competitor but a survivor.

Troubling Signs: If a company cannot remit sales tax or pay employment tax on a timely (regulatory) obligation, then the company is experiencing troubling signs of insolvency. A visit to the doctor is highly recommended.

Critical Care Signs: If a company receives Notice of Tax Lien, followed by Notice of Intent to Levy, then a company is in critical health condition. The time has come when creditors begin to exercise legal collection tools and imminent threat for seizure. It is strongly recommended to drive straight to the ER and demand triage attention. This patient has low blood count (cash flow) and is breathing on borrowed time.

There are many other warning indicators of a business heading for insolvency, which we cannot cover in this article. However, we encourage you to request a copy of our previous newsletter.

What to do next? Here is what we would do:

Stabilize Calm down and focus. Stop blaming. Then, determine if the patient has the strong desire to livemeaning is the business is still viable and/or the owners still want to continue?. Does it require surgery? Immediately remove waste and inefficiencies. Implement strict cash flow control, forecast, and daily monitor. Does it require blood transfusion (new money)? Contact suppliers and creditors informing the patient are in intensive care but in stable condition.

Quite often, when companies engaged tax negotiator professionals where a payment settlement is secured thinking the bleeding has stopped and all is well. Patient goes home happy. Historically not so. It simply prevented the impending seizure.

Settling trust fund taxes requires that a company must not default on the payment terms and absolutely must stay current on depository rules. That is a condition of 110% working capacity from a business that nearly had a seizure three days ago. Try this: Have Kobe Bryant back on the floor a day after knee surgery and see what happens Jackson is fired and Kobe's career is finished, and the doctor gets the lawsuit of his lifetime.

Installment agreement is a prescribed medication however haphazardly done timing and dosage installed in trauma procedure during stabilization phase not only temporary but becomes the eventual cause of systems failure. Debt settlement is designed after diagnosis and negotiated at the restructuring phase. It is only when the doctor can safely write prescription and plan of action according to the patient's capacity to recuperate, develop muscles, regains strength and resumes productive life.

Diagnosis Next step is identifying the root causes, not the eventual symptoms (tax lien), of the company's problems. For example, a heart attack is not the root cause of death; it is a symptom of underlying disease, heredity, or a set of lifestyle choices. Simply put, it is the manner of how the company conducted its business affair created cash flow problem.

Like most of our clients, receiving Notice of Tax Lien is a pure sign of deteriorating health symptom. These unpaid taxes developed 69 months ago and rising. Like a contagious disease, when not cured, will find itself at the owner/officers personal home.

Restructure, Recuperate and Re-grow A company who just was discharged from the hospital needs time of adjustments in doing business. Management is given with many business-monitoring tools. Numerous wastes and old bad habits have been eliminated. Wounds take time to heal. Like the physical therapy, operational muscles are weak and needs time for training and strengthening. New set of lifestyle are difficult to adopt and on occasion, the system simply rejects the medication... it requires feedback, re-adjustments and action. Employee moral becomes an important factor. During the recuperation period, this company must implement program how to stay healthy in conduct of business in a well-balanced motion both physical and spiritual. In a well-established period, this company should once again back in the ball game.

The moral of the story: When experiencing life threatening wounds, do not settle with a general practitioner for the immediate cure. It could very well be your last business decision. Seek a specialist that will guide you to wellness. Simply said, to survive in this competitive world, a business must be healthy and strong in both body and spirit. One must possess solid immune system to repel destructive elements from the outside and from within, and whose leadership finds strength in humility, and determination to fight during times of difficulty.

POST COMMENT

Preparing Tax Accurately Is Important All About Taxes and E-file Protection Watch San Francisco 49ers vs San Diego Chargers live Stream NFL Week-15 on 16 December 2010 Chris Devonshire-Ellis on Double Tax Treaties in China Creating Wealth - Gain The Tax Advantages Of The Rich Why Would You Hire Experts For Tax Preparation? Connecticut State Tax Rate 2010 – Connecticut Tax Brackets 2010 Get Copy of Income Tax Return Easily! Searching For Licensed Tax Resolution? No Big Tax Hike For Americans... For Now Choosing the Best NFL Handicapper A Simple Strategy to turn $5,000 a year into $3.3 million tax deferred About NFL investigates, issues guideline