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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Hello, My name is XXXXX XXXXX I have a corporate tax question.

Resolved Question:

Hello,
My name is XXXXX XXXXX I have a corporate tax question. I started a LLC business in 2006 and listed my daugter as the owner. She was 18 at the time and reason that we listed her as the owner, I had a previous business that had failed and there were some debts to be dealt with, so I put the new company in my daugter's name so I could start fresh while trying to resolve old debts. I have filed the corp tax returns thru 2008, but haven't file a corp return since then, primarily because I was struggling to survive and just didn't do it thinking that there was no harm beings that the company was not going to owe any taxes for those years not file. I just learned that the IRS will charge the corp $4000 for every year that a return hasn't been filed. My daughter is still in school and works part time, but I assume she is going to be on the hook for $16,000 in penalties. I am just sick over this and don't have the money to pay this, and I was wondering if you have any suggestions on how to deal with this. Please advise
Submitted: 1 year ago.
Category: Finance
Expert:  Megan C replied 1 year ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

How are you today?

Megan C :

I'm sorry to hear about your tax debt. I know it's a difficult and stressful time dealing with this

Megan C :

However, you should write a letter and request an abatement of penalties. If you have a good reason for not filing the returns, such as being ill, then the penalties could be abated

Megan C :

It doesn't hurt to ask. The worst that can happen is your request for abatement is denied.

Megan C :

If you still must pay the penalties, then the IRS will allow you to set up a payment plan to allow you to spread the tax over a period of time.

Customer:

The problem is that the company is in my daughter's name, so they are going to come after her to pay up, right ?

Megan C :

Unfortunately, it would be her responsibility according to them

Megan C :

but you can always set up payment plans and you can pay the debt

Customer:

will she have to be involved in setting up the plan ?

Megan C :

she might have to sign the installment agreement...but you could even have the payments drafted from your account

Customer:

will they access the payment amount based on her income ?

Megan C :

Yes, it would be based on her income...but if you could afford a payment larger than what her income affords, they won't prevent that.

Customer:

I also read that if has been 3 years since the corp has filed a return and no request has been made by the IRS, There is a possibility they will dismiss the tax if the company is no longer in business. Is that true?

Megan C :

Unfortunately, the IRS is not that forgiving. If tax or penalties is owed, they typically will pursue it

Customer:

Ok, so your advise is to first file for an abatement, then if denied, try to setup a payment plan, right ?

Megan C :

That is correct. That's the best you can do if they don't forgive the penalties

Customer:

Is it possible that they would consider a compromise for a lessor amount ?

Megan C :

Yes, but it's very rare...only when you have a lump sum and they do not believe that they could collect more than that lump sum over time.

Megan C :

So, if you offered say $8,000 they would have to look at your case and say to themselves there's no way we would get $8,000 even over time.

Customer:

beings that she is only 25 years old, that is probably unlikely, right ?

Megan C :

I can't say ... but I do know that the offers in compromise are rarely accepted.

Customer:

ok, thanks for your help

Megan C :

You're welcome

Megan C :

If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks, Tony for your positive rating. If you need anything else in the future, please don't hesitate to contact me. It was a pleasure working with you today.

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Megan C
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Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level