Early Interaction Initiative
The IRS has developed the “Early Interaction Initiative”. The initiative acts by more quickly identifying employers that are getting behind on their payroll or employment taxes. It is designed to HELP employers, not hinder them. Methods such as letters, phone calls, and even visits from IRS officers will encourage them to pay the IRS and avoid penalties and interest.
In the past, the IRS did not even attempt to contact the employer until it was too late and the employer was in desperate circumstances. This often led to the shutdown of the businesses because the processes of dealing with back taxes tends to be stressful on the business owner.
Editor’s Comments
Finally! A process that has been detrimental to many businesses over the past 30 years has been corrected. For too long, the IRS has been very relaxed in its collections of payroll and employment taxes. The employment and payroll taxes would become a burden on the employer and business owners would frequently have to borrow the funds or even shut the business.
This is an inequitable result given that many small businesses employ a large portion of the workforce.
By: Basi and Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors