The IRS Left a Note on My Door

By Stacy Menz, PT, DPT

“The IRS left a note on our door.”

These are words I definitely did not want to hear. I didn’t even know that the IRS made house calls! So what are the events that led up to this phone call from my office manager? Well, they were the mistakes of a newbie business owner who didn’t have good systems in place.

Let me back up for a minute. When I started my business, it was just me. When I added my first employees, I needed to figure out a way to execute payroll. I was already using QuickBooks, so I thought using their software would save money. At that time, after processing payroll, you had to pay your payroll taxes separately. This meant that each time I completed a payroll, I then paid payroll taxes. Easy!

As our clinic started to grow, I hired an office administrator, who took over payroll responsibilities, allowing me time to focus on training new therapists and treating more kids. This was great. I was set free from some of the administrative tasks that had been absorbing part of my schedule and could spend time doing what I loved instead.

But now I was no longer the one processing payroll, and I had neglected to put a system in place to ensure the payroll taxes were taken care of. I don’t remember how long we went without paying taxes, but we eventually received a notice in the mail — it’s amazing how fast small amounts of money add up, especially when there are penalties and late fees included.

I reached out to my accountant (having a good accountant is worth the cost!), and he started the process of contacting the IRS to find out how we could pay them back and whether we could set up a payment plan. I certainly didn’t have $20,000 readily available. While we were working to get this all figured out, the IRS apparently became impatient and decided to pay us a visit. At that time, our administrative office was still in my apartment, and in order to get to my door, the IRS agents had to find a way to get past the secure entry. It’s still wild to me that they left a note on the door!

Interestingly, when I shared this story with many others, non–business owners kept telling me the same thing: that I could negotiate the taxes with the IRS. What they didn’t realize was that these were payroll taxes, not my personal taxes. It was never my money to begin with; it was money withheld from my employees’ checks. We ended up securing a private loan that allowed us to pay the money back in full, but the interest from the loan made the backlog of taxes, which was already compounded by interest from the IRS, an even heavier burden.

What did I learn from all this? I learned that I will always use a payroll company that handles the taxes, and unless you’re a financial wiz, you should, too. It’s worth the cost. In the long run, I didn’t save any money by doing it myself, and it ended up costing me way more than it would have if I would have used a payroll company from the very beginning. And above all, I learned the importance of setting up systems and prioritizing checks and balances. As our administrative tasks have become more complex and as my practice has grown, this has become absolutely essential.

One piece of advice from my dad, who is also a small business owner, was that it’s only a mistake if you make it again. I have told myself this many times over my tenure as a business owner and have done my best to learn from my own missteps and help others avoid the same ones. More importantly, I strive to learn from other business owners so I don’t run into the same challenges they did! 

Stacy Menz, PT, DPT

Stacy Menz, PT, DPT, is a PPS member and owner of Starfish Therapies in the San Francisco Bay Area. She can be reached at

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