Saturday, July 22, 2006

The Tax Man – Pay off the IRS Now!

George Harrison wrote the lyrics for the song, The Taxman, when he realized how much money the Beatles were paying in taxes once they started making money.

Taxes – one of the two most certain things in life (the other being death). Once the IRS decides you owe them, there’s no escaping.

If you find yourself in a situation where you owe back taxes to the IRS, you may find yourself with an almost impossible situation when it comes to raising money. Knowing that the IRS has a first priority lien on all of your assets should you have a past due tax liability, many lenders will simply not lend to your company.

If you have sufficient accounts receivable, you could sell them to a factor and then utilize the proceeds to pay the IRS in full. By removing this tax lien, you would then expand the list of companies that might consider providing lease financing, p.o. financing, factoring or even a bank loan.

There are also a limited number of factors that will buy your accounts receivable when the IRS has agreed to a subordination agreement or when the IRS has agreed to silence its tax lien as long as you’re current on your IRS payment agreement.

So if you’re tired of working for no one but the taxman and would rather focus on growing your company, consider factoring as a solution to your working capital needs.

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