Partial Payment In Business Installment Agreement Saves $200,000!

We have worked with this taxpayer for quite sometime. He came to us in the fall of 2010 with a tax liability totaling over $200,000. He had a lot to do prior to setting up an agreement with the IRS as the business was not current or compliant with any obligations at the time. As you are all aware, a taxpayer must be current with the Federal Tax Deposits and tax returns prior to setting up an agreement.

After getting the taxpayer current and compliant we submitted a financial form that showed the taxpayer could pay roughly $500 monthly toward the liability. After working with the Revenue Officer for several weeks he agreed to set up the plan. The plan will pay out approximately $40,000 over the remaining life of the collection statutes. A net savings of over $200,000 will be realized over time after all interest and penalty accruals have been accounted for.

Another great success story is finalized as we maintain operations and keep people employed!!

Assessment Statutes Expire Saving My Client $180,000!

The IRS has an assessment called the Trust Fund Recovery Penalty which is used to assert a penalty to the responsible parties in a business when dealing with outstanding employment taxes. The IRS has a 3 year period of time to do this. The 3 year statute begins upon the actual filing of the return and original tax assessment. If the IRS misses this timeline, they cannot assess the taxpayer with the trust fund recovery penalty. I believe I have explained the trust fund previously in a different post. However, let me revisit; the 941 tax is made up of Federal Withholding, Social Security, and Medicare pulled out of each employees paycheck. The employer matches this amount as well. The Trust portion is the employee withheld portion only. Officers, shareholders, CFO's, Treasurers, and Partners can all be responsible for the trust portion of the debt. If held liable, liens will be filed, levies will ensue and other collection action will take place against the individual. Our client, by virtue of time, will be free and clear from the trust portion of the debt.

Our client ran a business and managed to incur a $302,000 liability to the IRS for employment taxes. These accruals took place over a 4 year timeline from 2003 up until 2007. The last ASED (Assessment Statute Expiration Date) expired on 4/15/2011. We estimated the trust portion of the debt to be around $180,000. Our client will no longer be responsible for paying this back or at risk for assessment.

We have managed to wrap up the old business, close it out, and save our client $180,000!!

Partial Payment Installment Agreement Saves 1.3 Million

Our client came to us with well over 1.5m owed in back 941 tax liability. They were also missing several 1120 tax returns, 940 tax returns, and 941 tax returns. After about a year of working with the taxpayer, keeping them protected from aggressive collection action, and working with the Internal Revenue Service, the taxpayer was finally able to file all missing returns. Upon filing all the missing returns, the business was able to stay current and compliant with all Federal Tax Deposits.

At first the IRS thought the business could pay closer to $15,000 monthly, an amount that would suffice and pay the liability off over time given the collection statute. However, the taxpayer indicated she could not afford this amount, nor did the financial data show the business could afford a large payment. The IRS also wanted to seize assets and real property to help pay down the tax liability. All seizure would do is put the taxpayer out of business and 50 people out of work. We were able to convince the Revenue Officer working the account to set up an agreement of $2,000 monthly. The IRS decided to not seize the business location or shut them down. Over the next 100 months the business will pay back $200,000.

We consider this a great resolution as it keeps 50 people employed, 50 families fed, a business going that has been open for over 40 years, and the economy in a small town alive. We take pride in what we do to save businesses across America from closing down. If we can work out an equitable resolution with the IRS and keep people employed, we know we have done our job correctly!

Offer In Compromise Saves Taxpayer 85%!

Our client came to us last fall with a unknown tax liability. She also needed her 2009 tax return prepared. After preparing her 2009 tax return, we determined that she owed approximately $30,000 in taxes and a total of $35,000 with penalty and interest. After reviewing the financial statement we made the determination that she qualified for an Offer In Compromise.

Her liability incurred was based on life insurance distributions that were never paid back. These distributions go back to the year 2000, but when she couldn't pay back the amount of money taken over the last 10 - 11 years, it was taxable in the most recent year. Our client is just under the age of 30 years old. She works as a secretary for a tech company in the local area. She doesn't make much money, has 1 child, and very limited resources to pay her tax liability. We offered the value of her assets consisting of equity in two vehicles, totaling just over $5,000. The Offer In Compromise doubt as to collectibility was the appropriate Offer In Compromise to file.

After the IRS was aware of how the liability was incurred, reviewed the financial documentation, and discussed the Offer In Compromise we submitted, they agreed on a settlement. The taxpayer was very happy with the results needless to say. If you are looking to settle on your tax liability and want to know if you qualify for an Offer In Compromise, call us now at 720-398-6088 or check out our website at www.highlandtaxresolution.com.

Saved Corporate Officers From $200,000 in Trust Fund Assessments!

The trust fund portion of the tax liability owed by a business is made up by the medicare, social security, and federal income taxes withheld from employees paychecks. When an officer of a corporation does not in turn take these monies and remit them to the Federal Government, the officer can be liable for what is called a trust fund assessment, or Civil Penalty. In essence the employees are "trusting" the employer to remit these taxes on their behalf so they pay in their fair share of SSA, Medicare, and Federal Withholding.

Our client came to us owing the government over $300,000 in 941 liability to the IRS. We immediately started having them remit voluntary payments to the IRS and designating these payments toward the trust portion of the taxes. After our initial financial review we determined the business could afford to pay approximately $5,000 per month toward the liability. We offered this proposal to the IRS. After much consideration, a few appeals, and waiting on the IRS to get back to us the proposal was accepted. The revenue officer we worked with also worked on the trust portion of the liability as explained above. She determined both officers were responsible. At first, the liability was calculated incorrectly, but we will save these details for another posting.

When it was all said and done, we were able to negotiate a stay on the trust assessment. We had convinced the Revenue Officer that due to the liability, installment proposal, and the fact the taxpayer had made well over $45,000 or so in voluntary payments, that she should hold off on assessment. She ultimately agreed and had the taxpayers sign a waiver agreeing to an extension of the statue to collect. All this means is she did NOT assess the trust fund to the officers. Liens will not be filed against the officers, and the collection department with the IRS will not attempt to collect on this liability. The business has been current and compliant with all Federal Taxes due and current with installment payments. Our client was ecstatic when we told them the IRS would not be assessing the trust at this time.

Remember, if you work with the IRS diligently, comply, and know your rights, great things will happen!!

Crossing your T's and Dotting your I's

As we all know when dealing with the IRS it is important to make sure you cross your T's and dot your I's.

We recently had a client who came to us with a closed business. He wanted to simply pay the trust portion of the liability (Federal Income Tax, Social Security, and Medicare withheld from the employees checks) and close the business formally with the IRS.

We assisted him with the closure of the business and gave him the appropriate payoff for the trust fund. The business owed closed to $50,000 in 941 tax liabilities upon closure, the trust fund was $30,000. The client paid the $30,000 in trust fund with one check. We filed all the final returns, final financial statements, recorded the final bank statements, and informed the IRS of the closure. We also disclosed the asset situation (taken over by a factor at closing). Upon finalizing all the documentation informing the IRS of the dissolution, the IRS determined the business liability to be currently non-collectible.

So remember, obtaining all the required information prior to addressing the IRS liability is key in obtaining a successful resolution!

Tis the Season for Filing Returns!

Tax season is upon us and the deadline is quickly approaching to make sure all personal income tax returns are filed with the IRS and State taxing authorities. Please be sure to get your tax return information over to your tax preparer or CPA as quickly as possible.

Keep in mind, we now prepare all types of returns here at Larson Financial, Inc. We prepare 1120's, 1065's, 941's, 940's, 1040's and all State returns associated with each particular entity.

Please call today for a free quote and we will be sure to prepare and finalize your tax returns!

Cheers!