Tax Payment Plans
If your unpaid back taxes mount up to a point where you cannot afford to pay them all at once, and the other tax strategies discussed here do not work for you, then IRS allows taxpayers to set up payment plans to pay off your back taxes gradually. Unfortunately, during all this time, interest continues to accrue.
To apply for a payment plan, IRS will ask you for a full, detailed set of financial statements, a Form 433-A, 433-F, and/or a Form 433-B if you have your own business. These are kind of a “tell all” set of questions that will reveal to IRS where all your assets and income sources are. The Forms are signed under penalty of perjury, so you must be truthful and complete.
Like all other aspects of tax practice, however, there can be an art to submitting a payment plan application and the negotiations with IRS that can follow. I have handled hundreds of payment plans during my career, so if you think you want a payment plan with IRS or the state taxing authorities, you should call me.
US Tax Court
The United States Tax Court hears cases brought by taxpayers who are disputing a proposed tax assessment, usually the result of an IRS audit. If an IRS audit or other proposed assessment goes forward without an agreement from the taxpayer to pay, IRS is then required by law to issue by certified mail a “Notice of Deficiency” to the taxpayer. This notice is a kind of final warning giving the taxpayer exactly 90 days to file a petition with the US Tax Court. If the 90 days lapses without a petition being filed, then the taxpayer by law then owes the money to IRS.
Unfortunately, I have seen many taxpayers receive a Notice of Deficiency (“NOD”), ignore it or file it away, and then a few months later to their amazement, their bank account gets seized.
An NOD is one IRS notice you cannot ignore. Although I have successfully defended cases where an NOD has lapsed, that can be a major and expensive hassle.
I have overseen the filing of nearly 2,000 cases before the US Tax Court.
If you need to file before the US Tax Court, you should call me.
Unpaid Trust Fund Taxes
Trust fund taxes are that portion of payroll taxes that represent the taxes withheld from the employee’s paychecks. This is in contrast to payroll taxes that are purely the employer’s expense, such as the matching social security tax, or the unemployment insurance.
The IRS considers trust fund taxes in some sense “sacred” because the money was never really the employer’s in the first place. The money rather was withheld in trust from the employees paycheck to pay over quickly to the IRS. When employers instead keep this money for themselves, this money can generate a “trust fund penalty” to certain responsible individuals even if the employer is a corporation, LLC, or other type of business entity that would otherwise protect such individuals from liability.
To determine whether IRS can come after an individual for this money, IRS will conduct a “Trust Fund Recovery Penalty Interview” with certain persons to determine whether that person is a “responsible party” for the unpaid money. If IRS determines that the person is liable, then IRS can bypass the corporation or LLC and come after this person individually.
I have successfully defended millions of dollars of Trust Fund Recovery cases in my career. If you have a Trust Fund Recovery problem, you should call me
James J. Jackson
Attorney At Law, CPA
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