Why? How? When? Making designated payments to the IRS

When you make a payment to the IRS, it will be automatically applied to your account in a manner that is in the IRS’s best interest.
But what is best for the IRS in handling your payment can be different from what is best for you.
In some situations, it is in your best interest to make [...]

Trust fund recovery penalty: The uncollectible defense

The trust fund recovery penalty can cause financial havoc for anyone involved in a business that did not pay over its employee withholdings to the IRS.  Internal Revenue Code Section 6672 allows the IRS to investigate those in the business who were part of the decision not to pay the IRS and hold them personally [...]

Does the IRS have the right to see your personal finances before completing a trust fund investigation?

IRS trust fund recovery penalty investigations are a sure source of unease.  Trust fund investigations can place personal liability on you for not paying your employees’ withholding taxes to the IRS.
Adding to the dilemma is an IRS request during the trust fund investigation for a personal financial statement (Form 433A) detailing your assets, income and living expenses.
If the IRS makes a request for a [...]

IRS collection priorities and trends for 2010

What to expect from the IRS collection division in 2010:
1.     More aggressive IRS tax lien filing practices.
IRS Revenue Officers have been instructed to make decisions on the filing of Federal tax liens within 10 days of case assignment.   The IRS hit an all-time low for lien filings in 1999 of 167,000.  That has rebounded [...]

Trust fund recovery penalty: How much time does the IRS have to assess it?

It can be tempting to use payroll tax withholdings as a source of operating capital for your business, especially in troubled times.  But this is dangerous – the IRS can penalize anyone in your business who took part in this decision with personal liabilty for the unpaid taxes.
This is known as the trust fund recovery penalty.  The amount of the [...]

NAEA and the National Tax Practice Institute

I am fortunate that the National Association of Enrolled Agents has invited me to their annual Tax Institute on August 9 -11, 2009 in Baltimore, Md.
Here are the outlines for the topics I will be speaking on:
IRS collections
Tax bankruptcy
Trust fund recovery penalty
For more information on the NAEA and the National Tax Practice Institute, visit their [...]

Unpaid payroll taxes: The best way to make a payment.

I recieved a good question about how the IRS applies payments on employment tax liabilities.  The question was in response to my article and recent post about IRS trust fund investigations.
This is important.
If a business does not specifically designate the application of  a payment on an employment tax liabilty, the IRS will apply the payment [...]

Trust Fund Interview and Form 4180

In today’s difficult economic environment, expect more businesses to resort to using payroll tax money to stay afloat and a corresponding increase in IRS enforcement measures. With bank lending tight, employee tax withholding is a ready —but dangerous—source of immediate operating capital.
But the IRS does not like being made an unwilling partner to a loan…
Read [...]

Collection of IRS withholding taxes against business owners and managers

The IRS takes the decision to use employee tax withholdings to pay business operating expenses rather than the IRS quite seriously.  The owners and managers of the business who make these decisions will find the IRS coming not only to the business, but to them, to recover a portion of the withholdings.  
This is an [...]

How does the IRS approach collecting unpaid employment taxes from a closed business and its officers?

I received this question from a reader about a closed business that owes employment taxes to the IRS, and her personal liability for the taxes:
The IRS is trying to collect on employment taxes from a company that has been out of business for several years. As an officer, I have already been held liable.  Can [...]

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