Saturday, March 20, 2010

State of Kansas Partial Pay

We have worked with the State of Kansas Department of Revenue with regard to many different taxpayers. For the record the State taxing authorities are much more aggressive than the Internal Revenue Service. This means that if a business owes a tax the State will not hesitate to Seize, Shut Down, Levy Bank Accounts, Levy Customers, etc., to collect the tax.

This particular client came to us in the fall of 2009. She is a sports goods and outdoor equipment rental and sales store. She houses several different types of equipment typically used for summer sporting. However, with winter approaching in 2008 and with the downturn in the economy, she was unable to pay or file her sales tax returns and withholding returns for 2008 and a good part of 2009. The State of Kansas was getting ready to shut her down when she came to us.

After 60 days we were able to get the taxpayer current with her tax returns, she was missing 15 or 20 sales and use (these are filed monthly) and several quarterly and annual returns. Once the returns were filed the State came up with a balance due of over $120,000. Typically the State will allow for repayment of the debt within 5 years. However, our client could not afford to pay $2,500 or $3,000 per month toward the outstanding debt. As such, we sent in a financial statement for the business as well a personal financial statement for the officer of the company. This financial statement concluded she could only afford to pay $1,500 per month, an amount that would service the debt in 120 months versus 60. The State finally agreed and accepted our proposal. We were thrilled and so was our client as she could stay in business, afford to repay her debt and keep up with her current obligations. The client is another satisfied customer and agreed to be a reference as well.