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socrateaser, Lawyer
Category: Employment Law
Satisfied Customers: 38899
Experience:  Retired (mostly)
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I am 64. CPA 27 years. Current employment 3 years. When

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I am 64. CPA 27 years. Current employment 3 years. When I started co. was seriously in debt payroll tax FED & ST. Much paid since I started. I got letter from IRS for "reason for decrease to Fed Tax Deposit. Notice 784 says "we will decide who the responsible person or persons are who acted willfully. I do the accounting and payrolls. I can't sign checks or authorize any banking. The notice also says "any person who had responsib for certain aspects of bus and financial affairs may be responsible. This category may include accountants. I am a trained CPA with ethics, etc., it tells me to not associate or work for certain kinds of entities. My question is: should I leave now and go to the unemployment office and tell them why? What is my risk?

If you provided accurate payroll records and your employer disregarded those records and failed to remit employment taxes as a result, then you are not liable.

If you willfully or with knowledge of falsity provided inaccurate records or supervised persons who provided inaccurate records, and your employer failed to remit as a result of your errors, then you could be held liable.

The fact that you had no signing authority or monetary control is evidence in your favor -- but it's not dispositive, because what matters is whether or not you knew what you were doing and that knowledge operated to create an insufficient remittance of employment taxes to the IRS.

I can't tell you what you should do, because we are dealing with something where it would be against your interests to disclose whether or not you knew what was happening concerning this matter. So please don't tell me what you knew or did not know.

That said, if I were without liability to the IRS, then I would not resign, because if I do, then the employer will have free reign to make me the "fall guy" for the errors, and I won't be there to defend myself. Better to be present and able to do some damage control if possible.

Hope this helps.
Customer: replied 4 years ago.
Relist: Incomplete answer.
I need to talk o someone who knows the IRS.

I'm pretty good at predicting legal outcomes, and I would really like to try to help you, if at all possible. I'm uncertain why you have rated my services as "poor" and I would appreciate an explanation, if nothing else.

Customer: replied 4 years ago.

I am an excellent accountant (CPA) from many years experience. I run payroll and pay 941 online (due weekly, weekly payroll) I have schedules that show taxes due (there so many) accurate to the penny. I show this to the owner weekly also. 11 employees. I file everything on time. The main reason he doesn't deposit taxes is because there is no money. I know exactly what is going on because I prepare the work, but I have no way to pay anything. I need to determine if my career, welfare and life is at risk to the point to where I need to leave, somehow. I don't think time is on my side here.

Okay, well I am an excellent lawyer, with a judicial temperament, and I am nearly infallable when it comes to predicting legal outcomes in advance of litigation (which tended to lose me a lot of clients, because clients don't want to hear that they're gonna lose, before the first paper is filed).

IRC 6672(a)
provides the elements of the offense concerning the Trust Fund Recovery Penalty. The key is truthful accounting or willfulness. You have just admitted to knowledge, but also that you truthfully accounted, and you had no authority to pay. Therefore, under those unque facts, you are not legally liable for the penalty.

Whether or not this level of scrutiny will be lost on the investigator is difficult to assess. As I'm sure you're aware, the IRS has no shortage of boneheads. Sometimes that can work to your advantage. But, were I the judge in Tax Court reviewing your facts, if everything you just said is verified as true, then you cannot be held liable, because you do not meet the required elements under the statute.

See also, Barton v. U.S., 988 F.2d 58 (U.S. Eighth Cir. 1993) ("when deciding to bring a § 6672 claim against a corporate officer, the government cannot reasonably rely on the officer's corporate status and mechanical functions if it is beyond dispute that the officer lacks tax-paying authority.").

I hope you will reconsider your previous rating of my services and provide a positive rating. Regardless, please let me know if I can be of further assistance.

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