Potential Results of A Forced Liquidation

Business Briefs

Do You Know What a Forced Liquidation Can Do to the Value of Your Business?
If liquidation is forced on a disabled business owner or on the executor of a deceased business owner, it can quickly become public knowledge that there is pressure to dispose of the business, and these results can be anticipated:
  • Sale of business assets at greatly reduced prices.
  • Elimination of the disabled business owner’s or surviving family’s primary source of income.
  • Sacrifice of any goodwill value that might have facilitated sale of the business as a going concern.
  • Difficulty in collecting accounts receivable.
  • Immediate demand by creditors for settlement of their claims.
  • Possible liquidation of other estate assets to pay business debts.
The liquidation value of a business is unpredictable and may be substantially less than the value of the business as a going concern.
The Alternative… A Planned Liquidation:
In some situations, the liquidation of a business interest at an owner’s death or disability may not be just an appropriate decision. It may, in fact, be the only possible outcome under either of these circumstances:
  • The success of the business is completely dependent on the personal skill and experience of the owner.
  • There is no successor management in the form of a capable family member, a co-owner, a key employee interested in purchasing the business or an outside buyer.

In these circumstances, the question then becomes:
Will the liquidation take place on a forced basis, or will it be planned in advance to allow for the most advantageous disposition possible?
When liquidation of the business at an owner’s death or disability is the only viable alternative, the primary objective should be to plan in advance for an orderly liquidation that results in the greatest possible value for the disabled owner or surviving family. Please contact our office if we can help.
To view the complete NFS Business Briefs Newsletter for June 2012, click here.

What to Do If You Haven’t Filed an Income Tax Return

Filing a past due return may not be as difficult as you think.

Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. It is important, however, to know that full payment of taxes upfront saves you money.

Here’s What to Do When Your Return Is Late

Gather Past Due Return Information

Gather return information and come see us. You should bring any and all information related to income and deductions for the tax years for which a return is required to be filed.

Payment Options – Ways to Make a Payment

There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash.

Payment Options – For Those Who Can’t Pay in Full

Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise.

Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan.

  • A short-term extension gives a taxpayer up to 120 days to pay. No fee is charged, but the late-payment penalty plus interest will apply.
  • A monthly payment plan or installment agreement gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. In terms of how to pay your tax bill, it is important to review all your options; the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code. You should pay as much as possible before entering into an installment agreement.
  • A user fee will also be charged if the installment agreement is approved. The fee, normally $105, is reduced to $52 if taxpayers agree to make their monthly payments electronically through electronic funds withdrawal. The fee is $43 for eligible low-and-moderate-income taxpayers.

What Will Happen If You Don’t File Your Past Due Return or Contact the IRS

It’s important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions.

If you haven’t filed a tax return yet, please contact us. We’re here to help!