Any individual who has developed an IRS tax liability may have several ways in which they can pursue IRS tax resolution if the IRS recognizes them to have compliance status.  To that end, the IRS offers a variety of opportunities to resolve tax debt, and the individual may choose whichever opportunity best suits his/per personal financial situation.  The main avenues for pursuing IRS tax resolution include: the 1) Offer in Compromise; 2) Currently Not Collectible status; and the 3) Installation Agreement.  Read additional articles I have posted for more information regarding these methods of resolution.  For a business, compliance requires two main things.

The IRS requires that a business has filed all overdue tax returns in order to gain compliance status.  For corporations, that means filing all overdue or absent 1120 tax returns.  For partnerships, that means 1065s and for businesses with employees, 940s and 941s.

The 940s and 941s are usually considered the most difficult of these to stay up-to-date on.  For each quarter that a business had its first employee to the quarter in which they have their last, they are required to file one 941, and if there are periods during that time period when the business has no employees, it is still required to file a payroll return.  941s allow for a business to communicate to the IRS that the business will no longer have employees, after which point, 941s become unnecessary.  Tax return 940 operates under the same rules; however, they are only filed once per year.

The final stipulation for compliance is that any business remain up-to-date with its current payroll deposit requirement.  In fact, before a business can pursue IRS tax resolution, it usually must stay in compliance two or more quarters.  As a business facing a potential IRS collections action, it is important to either be in compliance status or know how to gain compliance status.