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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2498
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
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I have a company that was incorporated in 2003. Due to slow

Resolved Question:

I have a company that was incorporated in 2003. Due to slow busness I owed back taxes to IRS. The company is domant for about 3 years now. If I shut the company down by un-incorporating it and notifying IRS. I am personally responsible for the tax the company owe? Pease help!
Submitted: 1 year ago.
Category: Tax
Expert:  Tax.appeal.168 replied 1 year ago.
Welcome, THANK YOU for using Just Answer. My goal is to help make your life...a little...LESS taxing.

Yes, even if you properly dissolve the corporation, if there are taxes owed, the "responsible person", which is you, is liable for the payment of past due taxes. Note that there is a 10 year statute of limitations on tax debt collection. The statute period starts from the date of assessment. If you cannot pay the full amount due, you can request to be placed on a payment plan. SEE BELOW:

IRC § 6672(a) imposes a penalty on any responsible person who willfully evades or fails to collect, pay or account for payroll taxes. The amount of the penalty is the tax evaded or not collected, accounted for or paid to the government. To be liable for the tax, a person must have possessed actual and significant authority over an enterprise’s finances and decision making, including paying the taxes (a responsible person) and either knew the payments were not being made or recklessly disregarded whether they had been made. Factors that can indicate such authority include that the person: “(1) served as an officer of the company or as a member of its board of directors; (2) controlled the company’s payroll; (3) determined which creditors to pay and when to pay them; (4) participated in the day-to-day management of the corporation; (5) possessed the power to write checks; and (6) had the ability to hire and fire employees” (quoting Plett v. U.S., 185 F.3d 216 (4th Cir., 1999)). A company may have multiple responsible persons.

REFERENCE SOURCE:

http://www.journalofaccountancy.com/Issues/2010/May/Responsible person.htm

For payment plan information, you can refer to the following IRS webpage:

http://www.irs.gov/Individuals/Payment-Plans,-Installment-Agreements

--------------------------------------------------------

You can make monthly payments through an installment agreement if you're not financially able to pay your tax debt immediately. However, you will reduce or eliminate the amount of penalties and interest you pay and avoid the fee associated with setting up an installment agreement if you pay your tax bill in full. Before you apply:

  • File all required tax returns;
  • Consider other sources (loan or credit card) to pay your tax debt in full to save money;
  • Determine the largest monthly payment you can make ($25 minimum); and
  • Know that your future refunds will be applied to your tax debt until it is paid in full.

Fees for setting up an installment agreement:

  • $52 for a direct debit agreement;
  • $105 for a standard agreement or payroll deduction agreement; or
  • $43 if your income is below a certain level.

Apply for an installment agreement

Please let me know if I can be of further assistance to you regarding this matter.

 

Thank you again for using JUST ANSWER.

Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2498
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
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