A few years ago, Jim Beam came out with a new product called “Devil’s Cut.”
According to their website, “When bourbon ages, a portion of the liquid evaporates through the barrel and up toward the heavens. Believed to be angels claiming their dues, this has been dubbed the “angel’s share.” Jim Beam Devil’s Cut is not that portion. Instead, it’s made from the liquid that gets trapped deep inside the wood of the barrel—the devil’s share. And through our proprietary process, we’ve found a way to extract it.”
It’s clever marketing for the barrel-extracted liquor moonshiners commonly call “swish.” It’s also the perfect analogy for the way the government likes to tax businesses.
The Angel’s Share and the Devil’s Cut
When you are setting up a business, the government charges you a fee. The government then takes a portion of every cent you make. It is the first creditor, the first customer, the first person you pay. It takes the angel’s share.
As United States Supreme Court Justice Oliver Wendell Holmes, Jr. remarked, “Taxes are what we pay for civilized society.” The government believes this, and wants you to believe it too. That doesn’t mean you shouldn’t take advantage of every tax break and loophole your business qualifies for. The laws creating those tax-saving measures were written for a reason, so there is no shame in taking the government up on its offer.
The government also wants the devil’s cut. If your business is in trouble, or on the brink of bankruptcy, the government squeezes what it can out of you. It assesses fines and fees if you want to close up shop, and charges people who want to file for bankruptcy. If you fall behind on your taxes, both the IRS and the Wisconsin Department of Revenue levy fines, charge fees, and tack on burdensome interest rates.
Why Bankruptcy Attorneys Can Help Businesses Struggling with Tax Debts
As bankruptcy attorneys, we are often called on to assist businesses that are struggling to pay their tax debts. In some cases, these debts alone are what is pushing the business owner to consider filing for bankruptcy or closing up shop.
While most tax debt cannot be discharged through bankruptcy, there are steps you can take to minimize your tax liabilities.
The secret to resolving tax issues to your benefit is timing. When you file a late tax return, how far along the IRS is in its collection process, or when you choose to file a final tax return for a failing business, can make the difference between paying the IRS or the state 100% of their claims against you, or 0%.
Our firm can tell you what you need to do to begin addressing your tax liability without triggering an audit, and explain what your personal tax liability will be if the business fails. We will work with you to develop a strategy that will minimize, and possibly eliminate, your obligation to the taxing authorities. Please contact us today to schedule an initial consultation.