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Tips for Owner-Operators Who Can't Pay Their Taxes

Updated: Jan 12

Tax season can be a stressful time. Independent contractors who do not have taxes taken out of their paychecks are particularly susceptible to this difficult time of the year, and often grapple with what to do if they cannot pay their tax liability.

If you are in this situation, or know someone who is, we have compiled the top tips for contractors who cannot pay their tax bill.

The following 4 key tips are for any person required to file a US tax return who cannot pay the IRS the money they owe.

Tip #1 - File Your Taxes.

Even if you cannot pay taxes owed, filing your tax return is the best course of action. From the first day after the filing deadline, the IRS will assess a penalty if you fail to file your taxes on time.

It is never a good idea to avoid filing your taxes. You may think that you can sidestep these responsibilities without too much consequence, but the truth is you will be penalized. The taxes owed will not go away, and your debt to the IRS will grow every day you fail to file.

Think of it like taking a shortcut down a road that’s known to be unsafe (not filing/paying your taxes). It may be the quickest way to your destination (your profit), but you will end up losing time (money) in the long run. There are dangers along that route in the form of hidden potholes (penalties), buildup of mud and debris on your windshield (compounding interest), and a hazard taking you off the road completely (your settlements and bank accounts being garnished). The best route is the safest route, and that is where ATBS comes in – ready to guide you to tax safety.

Nothing positive will come out of not filing your taxes. If you think you are gaining financial freedom, you are mistaken. You can actually create many more problems for yourself and accrue more penalties and interest than you may realize.

Tip #2 - File An Extension.

If you are not prepared to file your tax return, you can file for an extension. The extension deadline is April 18th, the tax return filing deadline is then extended from April 18th to October 16th.

Although filing for an extension is an option, it does not prevent you from having to pay your taxes. You need to file an extension by the extension due date to avoid a significant penalty for failure to file.

Tip #3 - Do Not Ignore IRS Notices.

If you have already failed to file your taxes, you will be sent a series of notices once a tax return is determined to be delinquent. Do not ignore these notices! Call ATBS or your tax professional immediately. The best chance of getting you safely off that treacherous road is by working towards a solution as soon as possible. ATBS helps thousands of clients with tax resolution, and can determine the best course of immediate action.

Letters from the IRS will not go away, and they will increase in severity. Ignoring these letters will often culminate in garnishment of wages or settlements. If you reach the garnishment stage, you’re in big trouble. Do not let it get this far! Getting out of a garnishment quickly is a difficult thing to do. If you have debt with the IRS, the sooner you call ATBS the better the options available will be. We will help to prevent a wage garnishment or settlement. ATBS is here to help you!

Tip #4 - Let The Experts Help Lower Your Tax Bill.

If you work as an independent contractor in a specific field, there can be a long list of expenses and tax deductions. Tax experts who dedicate themselves to a specific industry tend to be more successful in finding ways to significantly lower your taxes.

At ATBS, we have an experienced team of experts in all things related to the Internal Revenue Service. These individuals work with you to reach compliance and to identify applicable resolution strategies prior to advocating on your behalf with the IRS as it relates to back tax delinquency. Our team's intent is to be sure you reach as comfortable a resolution with the IRS as possible and that you leave the experience well-equipped to avoid IRS Collections in the future.

ATBS can help prevent potential tax problems. These issues can happen, but that’s why we’re here. We can help move you forward, and get you back on the road to success!

Download our complete "Tax Resolution Guide for Owner-Operators" by clicking here!


Over 150,000 owner-operators have made the choice to hire ATBS over the past 20 years. We offer a variety of services including accounting, bookkeeping, and tax preparation. We also offer unlimited business consulting for our RumbleStrip Professional clients. A dedicated business consultant will help you keep your business “between the lines,” just like rumblestrips on the highway. If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827.

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