Each Tax season we get asked “Can I Write It Off?”
If you’re on an accrual basis (if you aren’t sure, ask your accountant), your outstanding receivables are considered income and you will be required to pay taxes regardless of whether you have been paid.
IRS rules and regulations pertaining to writing off outstanding receivables include exhausting all collection efforts.
We recommend that you review your outstanding receivables at least quarterly then get in touch with us to help you determine collectability so you can either get paid or write it off.