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.
Dedicated to posting successful tax resolution work that I have been a part of over the years. Please feel free to reach me at www.highlandtaxresolution.com or call us at 720-398-6088 for your free consultation.
Monday, May 2, 2011
Friday, April 1, 2011
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!!
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!!
Thursday, March 24, 2011
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!
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!
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!
Monday, September 27, 2010
Enrolled To Practice Before the Internal Revenue Service
After over 5 months of studying and 300 hours of reviewing Gleim material I passed the Special Enrolled Agent Exam! I have received my enrollment card and number and I am now permitted to represent taxpayers before the IRS. Please feel free to call, write, or email to ask questions about how to study and sit for the EA exam. I will be happy to entertain any questions anyone may have.
I want to thank my family, friends, co-workers, and Larson Financial, Inc. for all of the support I received during my studies and preparation!
Respectfully,
Mike Wallen, EA
I want to thank my family, friends, co-workers, and Larson Financial, Inc. for all of the support I received during my studies and preparation!
Respectfully,
Mike Wallen, EA
Partial Pay IA for business and individual!
The business came to us last year and had a serious IRS issue facing both the business along with the corporate officer personally. We had to review both his business and personal financial statements as the he owed the IRS $500,000 for the business and close to $200,000 personally on the trust fund portion of the liability. After further review, submission of documentation to the IRS, and months of waiting we were finally able to set up a payment arrangement for the business. We set up a monthly payment plan of $2000 per month. Usually the IRS wants close to $10,000 monthly to satisfy the statute requirements.
While reviewing the installment proposal for the business, the IRS decided to chase after the personal liability as well, sending collection letters, threatening levy, etc. This often happens and I would highly recommend representation for both the business and personal financial matters. If the business is represented and one thinks they can handle the trust fund portion on their own, think again! It is very difficult to handle both at the same time.
After submitting a financial statement to the IRS and the IRS allowing all necessary expenses, they agreed to a $250 a month plan with the individual. Therefore, the total plan is for $2,250 and our client can now make financial moves and decisions he could not make before.
Cheers!
While reviewing the installment proposal for the business, the IRS decided to chase after the personal liability as well, sending collection letters, threatening levy, etc. This often happens and I would highly recommend representation for both the business and personal financial matters. If the business is represented and one thinks they can handle the trust fund portion on their own, think again! It is very difficult to handle both at the same time.
After submitting a financial statement to the IRS and the IRS allowing all necessary expenses, they agreed to a $250 a month plan with the individual. Therefore, the total plan is for $2,250 and our client can now make financial moves and decisions he could not make before.
Cheers!
Tuesday, September 14, 2010
New Company Saved From Alter Ego Assessment of $82,000!
We have a client in the State of New York that runs a restaurant. Prior to hiring us for the outstanding State of New York tax issues they had a third party come in and purchase the assets, goodwill, and inventory from our client. However, they conducted this transaction without regard to the State Tax Liens in place covering over $82,000 in sales tax and withholding liability. The State of New York was attempting to assess the buyer with the entirety of the liability owed!
We had to go back and recreate the transaction by showing the State of New York the purchase agreement, sales documents, and have the client cut a check to the State in the amount of $6,000 and another $1,000 or $2,000 to cover the sales tax in relation to the transaction. Yes, the State of New York charges sales tax on the resale of assets, licensing, inventory, and goodwill in a business transaction. Unbelievable. We had to go through the Bulk Sale Unit, which by State law a buyer and seller have only 15 days to report the transaction and pay either the liability owed by the seller in full, or pay for the value of the assets along with the applicable tax. If they do not abide by this rule the buyer can be assessed the liability.
After negotiations with the bulk sale unit and the filing of an appeal with the State of New York they agreed to allow us a conciliation conference to discuss the issues with the transaction. We provided all of the sales documents and a copy of the payment that was made to the State when we went back to correct the problem.
Last week we heard back from the State of New York and they decided not to assess the new business with the $82,000 and accept the payment made, with penalty and interest totaling $3,000 to settle the issue. Therefore all in all we saved the new business from lien filings, levies, and other collection action the State might take with regard to the debt.
If you are considering selling an asset, a business, or assets within the business look no further than Highland Tax Group, Inc. at www.highlandtaxresolution.com to assist you with your issues. We can also be reached by phone at 720-398-6088.
We had to go back and recreate the transaction by showing the State of New York the purchase agreement, sales documents, and have the client cut a check to the State in the amount of $6,000 and another $1,000 or $2,000 to cover the sales tax in relation to the transaction. Yes, the State of New York charges sales tax on the resale of assets, licensing, inventory, and goodwill in a business transaction. Unbelievable. We had to go through the Bulk Sale Unit, which by State law a buyer and seller have only 15 days to report the transaction and pay either the liability owed by the seller in full, or pay for the value of the assets along with the applicable tax. If they do not abide by this rule the buyer can be assessed the liability.
After negotiations with the bulk sale unit and the filing of an appeal with the State of New York they agreed to allow us a conciliation conference to discuss the issues with the transaction. We provided all of the sales documents and a copy of the payment that was made to the State when we went back to correct the problem.
Last week we heard back from the State of New York and they decided not to assess the new business with the $82,000 and accept the payment made, with penalty and interest totaling $3,000 to settle the issue. Therefore all in all we saved the new business from lien filings, levies, and other collection action the State might take with regard to the debt.
If you are considering selling an asset, a business, or assets within the business look no further than Highland Tax Group, Inc. at www.highlandtaxresolution.com to assist you with your issues. We can also be reached by phone at 720-398-6088.
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