Several days ago I gave a talk about what it takes to run a business.
And the important role finances play in its long-term success.
Over the years I’ve known business people who were thrifty with their money.
And always paid their bills on time.
I’ve also known people at the opposite end of the spectrum.
Like in this Tax Court case I’ve read recently.
An insurance broker fell behind paying taxes.
For over two and a half years.
With fines and penalties the amount owed to IRS was around $100,000.
When the Notice of Levy came the business owner took the OIC route:
made a $3,000 offer to IRS.
(The IRS can accept OIC (offer in compromise) in tax cases when there is doubt they can collect the full amount of the tax owed.
Mainly because the taxpayer’s assets and income are less than the tax liability.
In this case the $3,000 would be “payment in full” for the $100,000 debt.)
IRS didn’t accept the offer.
The insurance broker took the matter to court.
But the Tax Court sided with IRS.
Neither the IRS nor the Tax Court felt the taxpayer qualified for an offer in compromise.
Here is the broker’s financial information:
$16,621 monthly income; $16,847 monthly expenses.
(Included in the monthly expenses: approximately $7,000 housing expenses; and $1,200 monthly lease payment for a luxury car.)
$980,000 in assets; $922,854 liabilities.
Healthier bank account
Poor finance management leads to a stressful life.
(Whether you are running a business or not.)
And numerous studies now show high stress is a contributing factor to poor health.
The cure is simple: spend less!
You’ll lead a healthier life.
And even your bank account may get “healthier.”
Thanks for visiting.