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Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3716
Experience:  Providing Financial & Tax advice since 1986
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My father owned a class s corp. It ran well until the late

Resolved Question:

My father owned a class s corp. It ran well until the late 90's then my father with a bad hart and being a severe diabetic made some very bad financial decisions. but the lack of oxygen to the brain caused early dementia. My dad at that point even paid a company to sell his company. It turned out to be a bogus co. he lost $38,000.00. In 1999 he and my mother started going down to Texas in the winter for health reasons. When he would leave that would force me to do every thing. All the staff he used to have, book keepers, sales, and such were all gone. What help we were able to get ended up doing more damage than good. In 2001 My dad owed over a half million dollars to the bank at 11% interest. The company vendor debt was over $150,000.00. and 33,000.00 in pay roll tax debt. I took him to an attorney but he refused to go bank rupt. they lost their land, and home, in 2002. the only thing they had left was their old moter home they were living in and social sec. Then the problem with the tax debt came to a head. I want to state my father and mother were the only stock holders and officers, in their company. Our neighbor across the steet from us was an Irs. agent so we went to her for help to sort it out. Instead she placed the maximum penalty she could apply, and then told me unless I signed for the tax, they would take their ss. plus the only thing they had to live in the 10 year old moter home. Like a fool and under a lot of mental stress on what to do over every thing and not knowing about the safety features of our incoperation . In great duress that agent of the Irs. tricked me into signing for that tax debt. since that time I have payed over $44,000.00 dollars on 33,000.00 actual tax debt. I need this to end is their any thing I can do.
Submitted: 11 months ago.
Category: Tax
Expert:  Lane replied 11 months ago.

Customer:

Hi, I'm so sorry to hear about your problems ... I would look at sitting down with someone who is an enrolled agent (EA) and a tax attorney as well .... These folks (EAs) are enrolled in a special program where they have had special training and are enrolled to "practice before the IRS," BUT THEY REPRESENT YOU, unlike your neighbor, who represents the IRS

Customer:

Also, ...

Customer:

You may want to consider, given the fact that you were essentially tricked, filing this form and talking to the APPEALS division of IRS (who are not allowed to discuss your case with the collection side of the agency)

Customer:

See this:

Customer:

You may appeal many IRS collection actions to the IRS Office of Appeals (Appeals). Appeals is separate from and independent of the
IRS Collection office that initiated the collection action. Appeals ensures and protects its independence by adhering to a strict policy
of prohibiting certain ex parte communications with the IRS Collection office or other IRS offices, such as discussions regarding the
strengths or weaknesses of your case

Customer:

Here's the link to this document:


Publication 1660 (Rev. 10-2012) - Internal Revenue Service

Customer:

Here's the form you use to start the process:


Request for a Collection Due Process or Equivalent Hearing

Customer:

Form 12153

Customer:

I can think of 1 other thing that may help; (1) an offer in compromise Form 656

Customer:

Here's the booklet on an offer in compromise: Form 656-B

Customer:

What might make the most send is going to someone that i an EA after having done some homework on these methods and discuss them .. I can not urgee strongly enough however, that you want an EA who is either a CPA as well or a tax attorney as well ... In my experience folks who only have the EA designation, without the academic background necessary for the CPA or law degree are not as likely to understand ALL of your options in a holistic way

Customer:

Questions?

Customer:

Based on the specific parts of the information that you've provided, it seems to me that there are legal issues (both regarding the corporation AND the deception of the agent) that would lend itself to speaking with an attorney

Customer :

I don't think so at this time. I will get this info and contact a CPA or tax attorney. Thank you very much!!!

Customer:

you're very welcome

Customer:

After you rate this will all stay here for you, and the links to the information will stay active as well

Customer:


If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

Customer:

Good lick with everything .. and let me know if I can help further

Customer:

LUCK

Customer:

Lane

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3716
Experience: Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Expert:  Lane replied 11 months ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Lane replied 11 months ago.

Thanks so much Ron,

If you’d like to work with me again, say “For Lane only …” at the beginning of your question.

Thanks again,

Lane

Customer: replied 10 months ago.

'For Lane only...'


Hi Lane,


We had another question for you.


Can a corporate officer, with no stock holdings in an S-type corp, be assessed penalties and interest on the corp tax debt?

Expert:  Lane replied 10 months ago.

Hi Ron,

The short answer is no (IF that person was not a shareholder).

The S-Corp, as a pass-through entity, is not actually taxed at all though.

The S-Corp does the 1120-S (an informational return, used to figure gain or loss) and then the gains or losses are "passed through" to the shareholders on a statement K-1 (which flows, then, to the shareholder's own tax return.

So, the S-Corp never really has tax liabilities, the shareholders do.



NOW, the only time an OFFICER (non-=shareholder) can be held responsible for the debts (of any kind) of a corporation is where it can be shown that the officer obligated the company, in a way that WAS in line with their own authority - you might find this in a job description for the officer.



Just to help you maybe "see around some corners," the place where IRS will have some legs to stand on will be regarding taxes that came from the time where you father WAS a shareholder OR where they will try to make the case that he let the shares go in order TO escape taxes, and that some of what was received as salary was really in effect dividends.




But, generally, if the employee-officer of the company only received a salary, and paid their taxes on that salary, and was not an owner, then they would not be liable for taxes based on profits from the s-Corp. Only the shareholders would.



Lane

Customer: replied 10 months ago.

'For Lane only...'


Hi Lane,


We have another question.


Is there an agency or office we can discuss this situation with, without going to court or an attorney?

Expert:  Lane replied 10 months ago.

 

I would sit down with a person called an enrolled agent.

 

Understand that these people DON'T work for IRS, they've just taken special tests and have access that others don't. THEY WORK FOR YOU.

 

 

Here's a list of them in SD

 

 

http://www.licensedprofessionalhelp.com/find_an_enrolled_agent_ea_in_south_dakota.html

 

 

THey specialize in handling problems.

 

 

I would start by calling a few of these and asking if you can have a first time free consultation... many do

 

 

Lane

Expert:  Lane replied 10 months ago.


One last follow up.

They have a professional obligation to keep your information private, so if you decide not to go forward with them, do not worry that they will give out ANY info.

I've seen folks think that just because the title has the word "agent" in it that they are IRS agents. They are not. These are business people that work for folks like you to get things worked out with IRS.




If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.

HOWEVER, if you need more on this specific question, PLEASE COME BACK here, so you won't be charged for another question.


Thanks
Lane
Customer: replied 10 months ago.

'For Lane only...'


For our final question,


If a corporate officer is assessed an S-type corps. 941 taxes, and they have no stock etc. other than a salary, can the IRS assess penalties, interest, and late payment fees as well as the tax debt onto that employee?

Expert:  Lane replied 10 months ago.


Yes, IRS sometimes calls this "responsible party."



The Trust Fund Recovery Penalty (TFRP) is based on IRC § 6672(a), provides as follows:

"Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax on the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over...."




DO remember, however, that this applies only to the responsible party, the person that was responsible for collecting and paying over the taxes.

Lane

I hope you will rate my answer on it's accuracy and thoroughness, rather than any good news/bad news content.

Hopefully having all the facts will help you to "see around some corners" in the future.

Customer: replied 9 months ago.

lane this morning we saw a 40.00 withdraw from our checking acct. we haven't extended any more Questions to just answer--were is this charge coming from-- Ron Spilde Aberdeen S.D. 10/04/2013

Expert:  Lane replied 9 months ago.

I don't know Ron.

You'll have to talk to customer service.

The experts here are just contractors and have no control over anything other than whether we decide to answer a question and risk whether we will be paid.

As I've told you many times, the ONLY way we get paid is when you rate an answer positively.

Looking back up here, it looks as if I've answered 7 or eight different questions (probably more as many of these ask more than on question.

I have made only $15, because you have only rated me one time here on this series.

I continue to answer questions in the hope of being paid.

Until you rate again, It is not the best use of my time to continue to answer your questions.

What you actually the Website, JustAnswer is between you and them.

Good luck with everything.

Lane





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