IRS Tax Controversy: Yes, the IRS Really Will Shut Down Your Business

Many taxpayers and business owners find it hard to believe that the IRS is really as ruthless as they are often portrayed. And they are surprised when I tell them that not only will the IRS relentlessly harass and pursue them via phone, mail, and in-person visits… but they won’t hesitate to take the next step and actually seize one’s business or home.

Say what you will about the IRS and its revenue agents, but one thing they don’t do is make idle threats. They have the power and the will to inflict tremendous damage on a family or on a business. A real-life example caught my eye this week, as Alaska’s KTOO.org reports on an Alaskan business that has been closed down by the IRS:

A public auction may be held later this year for a Douglas business that was closed down and seized by the Internal Revenue Service for not paying federal taxes over the last fourteen years.

It’s unclear exactly when P P’s Douglas Inn, formerly known as Louie’s, was closed up by the IRS. Douglas residents reported locked doors, upturned stools on tables, and dimmed lights just before the Independence Day holiday. Owner Patrick M. Peterson remembered during an interview with KTOO on Friday that federal agents closed down the bar sometime in May. He admitted that he did not pay federal taxes.

“Paperwork is not my big suit,” said Peterson. “I just couldn’t keep up with it. Up until 1999, I had a good bookkeeper that was taking care of it for me. So, I had everything caught up with.”

Peterson said he did have others working on his bookkeeping and taxes since then, but he said that “nobody came through with what I needed.”

He also blamed the unpaid taxes on having to cover expenses from as many as four different attorneys to deal with legal issues encountered by him and his daughter.

Federal tax records show that Peterson and his company Peterson Pacific Holdings owe nearly $1 million in back taxes.

Now, obviously failing to pay taxes is a recipe for disaster, and the owner of this business made a mistake by not hiring a professional to handle his accounting.

But it’s easier to fall in to this trap than you may realize. When bills and expenses are piling up, it can be very tempting to avoid paying your taxes. And once you’ve done it once, it can seem pointless to try and make things right. But the bottom line is that you will pay for it, sooner or later. The IRS really will take drastic measures to collect the revenue that they claim you owe. If you find yourself facing an IRS dispute, don’t let it go this far! Contact a qualified tax attorney now and work to resolve the situation. If you’d like to learn more, we can help. Please contact us today!