How can I check if a business owes back taxes to the IRS (Federal)?

Thanks for this info! Would a standard background check company be able to find tax liens or would I need to physically go to the county office? Also, if they do have liens but claim they're on a payment plan, is there any way to verify that?

A good background check company should be able to search for tax liens as they're public records, so you wouldn't necessarily need to visit the county office yourself. Many counties also have online search tools for public records, though the user-friendliness varies greatly. As for verifying a payment plan, the IRS won't disclose that information to a third party without proper authorization. You'd need to ask the business to provide documentation from the IRS showing the installment agreement. This could be a letter from the IRS confirming the payment plan or their official account transcript showing regular payments being applied to the tax debt.

How accurate is this tool? Like, does it just look at the documents you have or can it somehow access actual IRS records? I'm not sure my potential partner will hand over all their financials.

Sounds interesting but kinda suspect. How would it know about tax issues just from docs? Wouldn't you need access to actual IRS systems to know if they owe back taxes?

The tool doesn't actually access IRS records directly - no third-party service can do that without proper authorization. Instead, it analyzes the documents you have (financial statements, tax returns, etc.) to identify discrepancies or patterns that might indicate tax problems. It's looking for inconsistencies between what's reported in different places. For your situation, if your potential partner is hesitant to share financial information, that's actually a pretty big red flag in itself. Any legitimate business partner should be willing to provide at least basic financial documents for due diligence. The tool helps you make sense of what they do provide.

Wait this is a real thing?? How exactly does it work - do you have to give them your personal info? Seems kinda sketch to have a service that can somehow magically get through to the IRS when nobody else can.

I call BS on this. If it was that easy to get through to the IRS everyone would be using it. I've tried EVERYTHING to get through to a human at the IRS about my business taxes. No way some random service can do what the official channels can't.

You do provide basic contact info so they can call you back when they reach an agent, but you don't give them any sensitive financial details or anything. I was hesitant too but it's just your name and number basically. The service works because they've built technology that navigates through the IRS phone tree and waits on hold for you. It's not magic - they're literally just waiting on hold so you don't have to. When a human IRS agent finally answers, that's when they connect you. You still talk directly to the official IRS agent, the service just handles the frustrating hold time.

How much does something like that typically cost? I'm interested in this approach but working with a tight budget for my due diligence.

For my situation, I paid around $1500 for a business tax attorney to do a thorough review. This included checking for tax liens, reviewing their provided tax returns, and helping me draft language in our purchase agreement to protect me from undisclosed liabilities. If you're on a tight budget, you might find attorneys who will do a more limited scope review for $500-750. Just make sure they specialize in business tax issues. It might seem expensive upfront, but considering the potential disaster of inheriting tax problems, it was some of the best money I ever spent. My attorney actually found an unresolved state tax issue that would have become my problem after the purchase!

Thanks for this suggestion. I hadn't thought about business credit reports. Do you know if there's a way to get one without the business owner's involvement or permission? I'm trying to do some preliminary research before I approach them about this directly.