Computer Consulting

The Crisis

A computer consulting business had expanded over the years requiring the addition of several employees to provide necessary service to meet customer demands. The firm had undertaken a significant reduction of staff, on their own, attempting to regain profitability. However, the consequences of several months of unprofitable operations resulted in unpaid payroll taxes due to the IRS in the amount of $500,000. The company had entered into a monthly installment agreement with the IRS, but their payments were insufficient to pay even the accrued interest. Further, the firm’s officers had been personally assessed the trust fund portion of these unpaid payroll taxes by the IRS. Federal tax liens had been filed against the company and its officers.

Our Swift Action and Results

• Created a proforma profit & loss and cash flow projection to determine the firm’s ability to service the IRS debt and still remain in business
• Had the company and officer’s personal assets appraised
• Negotiated a settlement with the IRS based on asset values and the firm’s ability to pay
• Reduced firm and officers tax liability from $500,000 to approximately $22,000
• Had all tax liens released against the company and the firm’s officers
• The firm continued on to be cash flow positive and profitable