A Fellow CDL Driver Owes A Big Wad To The IRS

He has an LLC company, and decided to sell his truck and back to be employed

I wonder if there is a way to lessen his debt with the IRS…. Any comments will be welcomed

I wonder if there is a way to lessen his debt with the IRS…. Any comments will be welcomed

Roberto, I am sorry about your friends misfortune. The best way to lessen ones debts is to be extra careful about incurring them. The second best way is to pay them. That's what helps us create good credit and a reputation that is deserving of financial responsibilities.

You say your friend had an LLC. We don't know enough to know whether he had himself on a payroll or not. He obviously wasn't making the killing that people think they will make being an Owner/Operator or he wouldn't be in debt to the IRS. He either wasn't paying his quarterly taxes or wasn't taking care of his 941 taxes - we just don't know. They will sometimes discount those things, but it is hard to say without knowing the details of why he is in debt to them.

For the rest of us it is a good reminder how tenuous the O/O game can be. I assume Roberto's friend either wanted to keep the money he should have been paying quarterly, or his cash flow was so insufficient that he needed it to stay afloat. It is possible he was keeping all the money and acting like it was his salary. That is a very common mistake of independent operators. They see this money flowing in and they think this is mine!

In a business like trucking, very little of the gross revenues actually belong to the owners. Trucking is well documented in public records to have around a 97% operating ratio. That means 97 cents of every dollar that comes in goes right back out to pay the operating expenses. That means three cents on the dollar is our profit. One of the many places that money goes to is the tax man. He must get paid or we will end up without a business to operate. He is one of our biggest priorities in business. I'm telling all of you this without telling you how I learned these lessons, but you can trust me when I tell you I learned these truths the hard way. Any one who is in business either learns these things or gets shut down. They don't play with 941 taxes. They have got to be paid.

If an Owner/Operator tries to keep his gross revenues as his income he will inevitably be keeping someone else from the money due them. It sounds like Roberto's friend ran into this problem. He owes the tax man. He will need to work out a payment plan with them and try to see if they will discount what he owes them. Depending on how he incurred this debt they may work with him. My gut feeling is that they will not.

I agree, missing payments is silly, especially since you can make them very small...

Pay his debts?

Sounds like this has little to do with trucking, and everything to do with paying the IRS.

His first step should be to contact the IRS and begin repayment. The interest rate and penalties will be so high however that he'd be better off getting a personal loan to cover the debt.

Alternatively, he can pony up for a tax attorney, and negotiate lowering the debt.

The important thing to remember is the full name of the Internal Revenue Service: THE IRS, otherwise known as THEIRS

This is one HUGE reason to drive as an employee of a trucking company. They automatically calculate your tax liability and deduct the estimated amount. After you file your tax return - if you're lucky = you may get a tax refund!

I got myself in the IRS hole years ago with my landscaping business, think my 2nd or 3rd year. Learned yhe hard way like Old School was saying. If your buddy has been in good standing with the IRS up to this point and doesn’t owe more then 1 year, they may grant him a one time abatement for the penalties and interest. He will still have to pay all the actual taxes owed. They are usually willing to work out a payment plan as long as your respectful and calm when talking to them, cop an attitude and they will seize your bank accounts and put a lien on everything you own.

Also, if a payment plan is granted, pay what you agreed to or more each month and don’t miss a payment or be late

The IRS is the one organized crime organization i WOULDN'T want to owe a big wad to. I'd rather owe to the (insert name or country here) mafia than the IRS. They are more gangsta than the gangstas, more playa than the playas. You don't pay the mafia they break a leg, you don't pay the irs they take your paycheck, car and house. Your friend needs to call them and try to negotiate a lower settlement if possible, if not he needs to sell one of his kids to pay them back...or at least make serious efforts to get a loan to pay them. The IRS don't play around.

The IRS is the one organized crime organization/blockquote>

That's NO lie ! I had tax issues in the mid '95, from all my casino wins, I was making $51 a month payments, finally 6 months later I get a "receipt" showed, I was being charged $480 penalty/interest. ($1 was admin costs lol)

So my payment wasn't doing squat, so I quit making them, and beat em at their own game, 10 year rule,( in their own tax code) after 2005, my slate was clean.

Buddy just had an issue with em too, he recently paid over $700 towards his tax bill. Well they sent him a letter saying they didn't get the payment, when actually, they had cashed his check within 4 days !! He had to send them a copy of his cancelled check to prove he paid it. So they "lost" his payment?? laughable!!

If we charged that kinda interest rates, we'd be in jail for loansharking !