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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6238
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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My IL corp. dissolved in 09. It had unpaid state payroll taxes

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My IL corp. dissolved in 09. It had unpaid state payroll taxes dating back to 07-08. I received a statement yesterday notifying me (personally) of collection action.
Am I personally liable?
The tax amount is $2603.59.
Penalties and interest is 1343.40.
Total = 3946.99

Stephen G. :

Hello, my name isXXXXX & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.

Stephen G. :

If you were the "responsible party", meaning you were the person responsible for either depositing the payroll taxes or sending them in with a return, then you can be held personally liable.

Stephen G. :

If you were an officer of the corporation you can be deemed the responsible party even if another employee normally deposited the payroll taxes.

Stephen G. :

The same would apply if you owned the company & worked in the business.

Customer:

Can I reply?

Customer:

Guess so, So if I'm liable can the penalties and interest be nogotiated?

Stephen G. :

These payroll taxes are generally referred to as "trust fund" taxes in that they represent either income tax withholding, or the employer & employee share of a payroll tax credited to an employee and reported on their W2s.

Stephen G. :

Was this state income tax withholding?

Customer:

These are state with holding.

Stephen G. :

Usually if you can come up with a reasonable excuse for not making the timely payments, the penalties (but not the interest) may be able to be abated.

Stephen G. :

The problem with this particular situation is that the employees have already received credit for the withholding tax on their tax returns but the state never received the money.

Customer:

This notice is pay by 25th, or they may levy.

Customer:

If I just make a payment will that satisfy the notice?

Stephen G. :

The state's position is that rather than send the withholding taxes in, the company used those funds for other purposes.

Stephen G. :

You'll need to contact them & work out a payment arrangement & try to get the penalties abated in exchange for making the payments.

Customer:

Like the state, right?

Stephen G. :

What do you mean?

Stephen G. :

There should be a contact number and/or person to call on the notice.

Stephen G. :

Is this the first notice that you received?

Customer:

First one for a long time.

Stephen G. :

But not the first one, that's why they are saying they will levy, in order to get your attention.

Stephen G. :

You need to call them or they may levy if you don't pay the full amount. You may have to put the penalty abatement request in writing.

Stephen G. :

What's the date on the notice?

Customer:

Sept 4th

Stephen G. :

They should give you some time to pay off the obligation without a levy, although the faster you pay it the better off you will be; a levy will affect your credit rating.

Customer:

I'll give them a call, thanks Stephen.

Stephen G. :

If you make a partial payment, make sure you designate it to be applied to the tax itself.

Stephen G. :

If you need to contact me again with any tax or financial questions, you can just ask for "Steve G" at the beginning of your question. Thanks again for using us for your tax and financial questions. You may get a short survey from the site; if it isn't too much trouble I would appreciate it if you would answer it; the survey results are used to rate our performance;

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