case studies : tax debt resolution
Client Type: Tax Debt Resolution - Temp Staffing Agency
Challenge: After almost three years in a challenging marketplace, this client firm had generated debt to the IRS and state tax agencies. While the business remained strong and well-positioned for recovery, this entrepreneur could not find a partner to fund her business.
Solution: advance's team of experts worked to understand the tax issues, provided a flexible funding and service structure, and helped this company repay all of its debts and return to profitability.
Starting in 2001, this entrepreneur's business began to drop off. Her clients were using fewer temporary staff, and the clients she did retain stretched their payments over such a long period of time that the firm could barely continue to do business with them. At the same time, margins were being squeezed by a national franchise that had aggressively entered her market. Consequently, the firm had fallen behind in tax payments and was sitting with a sizeable debt to the IRS. Until this period, the company had been very successful and had enjoyed great funding relationships, first with a national funding company and later with a local bank. Now, however, in her time of need, these "partners" were nowhere to be found.
advance took a wider view of the company, looking not only at the current cash-flow challenges but also at the opportunities for growth and the firm's history. With the help of partner attorneys and tax accountants, advance's team came up with a realistic game-plan, not only to pay back the taxes owed but also to provide the capital needed to grow the business. An offer-in-compromise was reached with the IRS and, in less than one year, all past taxes were paid. The company was on its way to a full recovery. Plus, with advance providing its full array of back-office outsourcing services, the firm now benefits from the peace of mind that comes with smart planning and security from future tax problems.