Updated: Jan 13
Are you worried about your past-due taxes? If so, you’re not alone!
IRS non-compliance is a major problem among independent contractors in the trucking industry, as well as virtually all industries where there are independent contractors. Why is it such a common problem? For truckers, there are a few reasons:
No one teaches truckers about taxes before they become business owners
Bookkeeping is hard and boring, so it’s easy to fall behind on the road
Because drivers fall behind on bookkeeping, they tend to fall behind on paying and filing taxes too
All of that adds up to drivers falling behind with the IRS and getting saddled with back taxes, which is a big problem.
So, what should you do if you are behind with the IRS? You may hear all kinds of advice out there, but the reality is that much of what you hear is either incorrect, misguided, or not appropriate for owner-operators in the trucking industry. If you’re a trucker who needs help with tax resolution, then we recommend following ATBS’ Proven Path to getting out of debt with the IRS. Let us show you how!
This path is deceptively simple, but trust us: The devil is in the details! The ATBS Proven Path is as follows:
Become IRS Compliant
Negotiate with the IRS (if needed)
Manage IRS Compliance
The ATBS Proven Path works because it gets you into a position where the IRS will negotiate with you in the first place, then you can focus on having a successful negotiation with the IRS, and then you learn to manage your taxes so you never fall behind again.
Now let’s discuss each of these in more depth.
Become IRS Compliant
So what does it mean to be “Compliant” with the IRS? It’s actually fairly simple:
You need to pay your taxes on time each quarter (four times per year).
You need to file your tax return on time each year.
It seems simple but in reality, it’s very hard to stay compliant, especially as an Owner-Operator in the trucking industry.
If you can manage your compliance, then you’ll live in a world where the IRS is no more than an afterthought.
Let’s identify a few situations that cause people to be non-compliant with the IRS:
Drivers can’t pay the full amount of their quarterly tax amount due
Drivers wait to pay their taxes until their annual tax return, and they can’t afford to pay
Drivers can’t file their annual tax return on time
These are all very common problems. To stay ahead of these as best you can...
Don’t underestimate your quarterly taxes (also known as QTE’s)
Pay as much as possible for your QTE’s if you can’t pay the full amount due
File your annual tax return even if you can’t pay the full amount
If there’s no chance you’re going to be able to file on time, request an extension
So, as you can see, there are ways for you to mitigate major damage to your IRS compliance if you run into issues. However, the best thing you can do is make sure you never put yourself in a situation where you have to use any of these tactics! Which brings us to our next topic.
Negotiate with the IRS (if needed)
Alright, let’s talk about what happens when you aren’t able to stay ahead of Compliance problems with the IRS. This tends to be one of the least understood topics related to taxes and the IRS: What exactly happens if I don’t pay or file my taxes?
First things first, let’s get a common misconception out of the way right now:
The IRS WILL NOT negotiate with you on your tax balance due until you become compliant
Why? Because until you show the IRS that you’re willing and able to get caught up on your taxes, they have no interest in negotiating the balance due. So, the first step in the ATBS Proven Path is to Become IRS Compliant, and beyond that, also prove to the IRS that you’re willing to reform yourself to avoid falling behind in the future.
Let’s walk through a few topics to help you Become IRS Compliant and complete Step #1 of the ATBS Proven Path.
You need to commit to reforming yourself in the eyes of the IRS
You need to get caught up on filing your taxes
You need to get current on the number of QTE (quarterly tax estimates) payments you have missed for the current tax year
That being said, we find that many clients still owe significant amounts of money to the IRS by the time they obtain compliance. If that’s the case, ATBS can move on to Step #2 - Negotiating with the IRS.
How to negotiate with the IRS
#1) Always Remember: IRS Agents Are Human Beings
The most important thing to remember as you work on negotiating with the IRS is that the person on the other side of the phone is, in fact, a person. The worst thing you could possibly do is treat that human being like something other than a human being.
#2) What exactly does an IRS Negotiation look like?
The IRS Negotiation process is different for every single person, but in general, there are really two key things that need to be done each time:
Determine your final amount due on your total tax bill
Put a payment plan in place if you can’t afford the total, final amount due
#3) Before the Negotiation
First, remember to Obtain Compliance (Step #1)! Your IRS Negotiation will be a waste of time if you didn’t obtain compliance.
Second, we help clients prepare all of their necessary documentation. We gather copies of IRS letters or notices you’ve received, physician’s notes - if we’re going to be discussing medical/health issues pertinent to your negotiation - and we build any forms useful to you during the negotiation.
Third, we help our clients build and write out their Story prior to the negotiation. What do we mean by our client’s “Story”? It’s simply an explanation of why they find themselves in this current situation with the IRS.
#4) During the IRS Negotiation
First things first, let’s circle back around to our comment, “IRS Agents Are Human Beings.” If you take nothing away from this other than remembering to have proper manners on the phone with an IRS agent, you’ll be light-years ahead of many folks trying to negotiate with the IRS.
First, getting someone on the phone is hard and requires a ton of patience! You’d be surprised at how long it takes to get an IRS agent on a live call… sometimes it takes waiting all day on hold to get one person on the line! If you don’t have the patience to wait, sometimes it’s better to have someone do this work on your behalf.
When you get an agent on the line, be sure to gather their contact information for your records. Recordkeeping is a key part of your negotiation because, more often than not, you’ll end up speaking to more than one agent during your negotiation. Always be sure to gather their info and document your call!
Once you get an agent on the line, it’s time to review your Story and talk through any documentation you have available. Helping the agent get a good understanding of your situation is the foundation you’ll build on during your negotiation!
#5) After the IRS Negotiation
Once the negotiation ends and a plan is in place, it’s time to move onto Step #3 in the ATBS Proven Path: Managing IRS Compliance.
Managing IRS Compliance
What does managing IRS compliance look like?
First, you need to ensure you stay current with any Installment Agreements (payment plans) that you negotiated with the IRS.
Second, you need to pay your taxes on time moving forward (each quarter).
Finally, you need to file your annual taxes on time each year.
This is pretty simple and straightforward, but as we discussed earlier, it’s VERY easy to fall behind on your IRS Compliance.
So, what can you do to ensure you never fall behind on your IRS Compliance again? Let’s move on and talk about how ATBS can help!
How can ATBS help with trucker tax resolution?
Remember, ATBS can help with each step in the process, and, more often than not, we can help you with all steps simultaneously.
If you aren’t familiar with ATBS, we have been in business for over 20 years, and we’ve helped over 150,000 owner-operators stay out of trouble with the IRS. We focus on saving drivers time, we help them earn (and keep) more income, and we reduce the stress of dealing with taxes so they can focus on driving their truck while keeping the IRS no more than an afterthought in their minds. We do that via bookkeeping, accounting, tax, and business consulting services - specifically designed for owner-operators.
When it comes to IRS Compliance (Step #1 and Step #3), our RumbleStrip services are what our clients use to stay out of trouble with the IRS.
Not only can we help clients become compliant via our tax preparation services (Step #1), but our monthly RumbleStrip services are specifically designed to keep owner-operators compliant with the IRS (Step #3).
Now, the reason why most of you are reading this is because you are looking for help negotiating with the IRS (Step #2). Great news: ATBS can help with that too!
ATBS Tax Relief Pit Crew
ATBS’ Tax Relief Pit Crew is our team of trucking-specific tax resolution specialists who spend their days helping truckers - especially owner-operators - get out of debt with the IRS.
We have several different levels of service available to help our clients, so let’s briefly highlight each one.
For clients who have a fairly simple & straightforward negotiation in front of them, we offer 1-on-1 coaching - via our “Turbocharged Negotiation Coaching” program - with our team to train you on how to handle that negotiation yourself.
For clients who are starting to fall behind with the IRS - maybe they’re 1 or 2 years behind on tax filing - we have our “Tax Relief Tune-Up” program.
For clients who are very far behind with the IRS - 3 or more years of taxes need to be filed - we recommend our “Tax Relief Overhaul” program.
If you are in trouble with the IRS, or if you’re just trying to get ahead of any future problems with the IRS, our Tax Relief Pit Crew will be able to help you out!
If you would like to learn more, our Tax Resolution Manager - Barney Moran - recently held a webinar titled, “Tax Relief 101 for Owner-Operators: The Proven Path to Reduce or Eliminate your IRS Debt”, and if you would like to watch the recorded version of that webinar, please click the link HERE to watch that very informative session with our in-house expert!
We sincerely hope that this has offered you some knowledge and insights into how to deal with your IRS debt once and for all.
At ATBS, we know truckers, and we know how hard it is to overcome the feeling of hopelessness that can come with being behind with the IRS. Just remember that you are NOT alone! And, always remember that you can reach out to ATBS anytime to learn more about how we can help you put the IRS in your rearview mirror for good.
Thank you for everything you do to keep America moving. We wish you all the best in your trucking business, and we’d be happy to talk with you more about ATBS and our Proven Path if you decide you’d like to learn more.