IRS can really mess up business relationships AND seize your money when they go after your accounts receivable.
Hooboy, you’ve sold goods or services to a customer of yours, and then the customer gets a notice from the IRS ordering the customer NOT to pay your invoice, instead ordering the customer to give over the money to the IRS. As a result, your customer is ALWAYS upset with you because now the customer has to make a written response (on their time and at their expense) to the IRS about the business relationship between them and you, has to give the money to the IRS instead of to you, has to wonder about your business practices that have gotten you into this mess, has to speculate that, if you will not survive as a supplier to them, they will have to go find a new supplier (worse, they may decide to dump you as a supplier right away in favor of a new supplier to insure they will continue to receive the flow of goods or services), and has to worry that they may become part of a lawsuit should you or another party sue the IRS to stop the payments going to the IRS because there are competing claims for the money.
Now it circulates within your business network that you have IRS problems, including seizures. You’re trying to survive as a business and now THIS?
If you have accounts receivable outstanding and you have a reasonable belief the IRS is about to send notices to your customers, then pre-empt the IRS by:
1. Getting the money from your customer first. Go visit them, ask for a payment early. Offer a discount if necessary. Tell the customer you are going through a problematic audit and need to bring up to date all accounts. Then, deposit the funds dedicated to priority business payments within strict guidelines.
2. Writing a letter to your customers and saying something like the IRS has screwed up your taxes and as a result the IRS may send unfortunate or misleading notices.
3. Filing bankruptcy or filing a state insolvency proceeding such as an assignment for benefit of creditors.