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Tax.appeal.168
Tax.appeal.168, Accountant
Category: Finance
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Experience:  Tax Accountant
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I got a letter from IRS. They say there is tax overdue for

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I got a letter from IRS. They say there is tax overdue for $30,000 and may seize levy on my LLC. I believe that there is an error in their record. We have no overdue. The IRS's phone is busy all the time. What can I do?
Submitted: 2 years ago.
Category: Finance
Customer: replied 2 years ago.
Is there any IRS' fax to which I request to stop sezing levy? Their "due" is July 12, so I don't have time.
Customer: replied 2 years ago.
Another question. What if there was not enough fund at our bank account? What would they do?
Expert:  Tax.appeal.168 replied 2 years ago.
Welcome. Thank you for choosing us to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
In order to better assist you, please answer the following questions for me.
1) What type of tax is the IRS saying that you owe? Payroll or income tax?
2) Who made the tax payments? You or the CPA?
Q1: Is there any IRS' fax to which I request to stop sezing levy?
A1: There are many fax numbers for the IRS. My suggestion is for YOU and your CPA to go to the local IRS office and speak to a supervisor regarding the matter. At this point trying to reach them on the phone is not going to do you any good.
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Q2: What if there was not enough fund at our bank account? What would they do?
A2: If they levy your bank account and there is not enough in the account to cover the tax liability, they will take what is in the account at the time and may levy the account again and/or file a tax lien. Know that a levy is only good on the day that the bank receives it. It is not continuous. Example, if your bank account has $10,000 in it on the day that bank receives it, they will take the $10,000, leaving you with nothing. Also, keep in mind that the bank is required to hold the funds for 21 days in order to give the taxpayer time to try to straighten out the matter. Once the money is sent to the IRS, unless it is an error, it is highly unlikely that you will get those funds back.
Customer: replied 2 years ago.
Hello Angela,To answer your questions,1) What type of tax is the IRS saying that you owe? Payroll or income tax?
The notice says "form 8804" and it is about 2013.
2) Who made the tax payments? You or the CPA?
The LLC has only two partners (my husband and myself), and made loss every year. Tax report was prepared by our CPA.
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,
The Form 8804 is required to be filed by every partnership (other than a publicly traded partnership) that has effectively connected gross income allocable to a foreign partner must file a Form 8804, regardless of whether it had ECTI allocable to a foreign partner. The partnership must also file a Form 8805 for each partner on whose behalf it paid section 1446 tax, regardless of whether the partnership made any distributions during its tax year. The partnership may designate a person to file the forms. The
partnership, or person it designates, must file these forms even if the partnership has no withholding tax liability under section 1446.
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Are either of you a non-U.S. citizen?
Do you have copies of the tax report prepared by the CPA? What tax forms were filed? Do you know?
Customer: replied 2 years ago.
We both are non-US citizens. We use to live in the US, and our CPA has prepared the tax returns every year for the company and individual. Unfortunately, the documents are not here with me, but I believe we filed everything in time.I agree that we should visit the local tax office. However, we are no longer in the US. I am going to ask CPA to go, but I'm unsure if he can.
Expert:  Tax.appeal.168 replied 2 years ago.
As you both are non-U.S. citizens, certain documentation should have been completed. The Form W8-ECI should have been completed by the both of you. SEE BELOW:
Purpose of Form
Foreign persons are generally subject to U.S. tax at a 30%
rate on income they receive from U.S. sources. However,
no withholding under section 1441 or 1442 is required on
income that is, or is deemed to be, effectively connected
with the conduct of a trade or business in the United
States and is includible in the beneficial owner's gross
income for the tax year.
Do you recall completing a Form W8-ECI?
Link to Form W8-ECI/instructions:
http://www.irs.gov/pub/irs-pdf/fw8eci.pdf
http://www.irs.gov/pub/irs-pdf/iw8eci.pdf
If this form was not completed by the both of you, the CPA should have mentioned that this form needed to be completed. This matter needs to be addressed by someone. You can try calling one of the IRS international numbers for assistance. Refer to the following webpage for the contact information.
http://www.irs.gov/uac/Contact-My-Local-Office-Internationally
If the form W8-ECI has not been completed and filed, I am not sure how the IRS will proceed with this matter. As you have a CPA, I would suggest having him look into the matter to see what can be done. It sounds like the tax liability came from that form not being filed.
Customer: replied 2 years ago.
Angela, thank you for your information. I will try some things you sugggested.
My biggest concern is, would IRS seize partners' personal asset such as bank account when the LLC does not have enough property? If so, how fast are they?I have a horrible exprience with them a few years ago. Back then, they had wrong information about my LLC (they thought that the LLC had a hundred partners, while it has only two) and kept sending notice of levy, and they actually tried to seize our income.
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,
You are welcome. Sorry to hear that you have had a bad experience with the IRS. How did they mistake the LLC for having 100 partners instead of 2 partners? Sounds as if you were able to get that matter squared away.
By default, unless elected to be taxed as a corporation, a multi-member LLC is considered a partnership.
Q1: My biggest concern is, would IRS seize partners' personal asset such as bank account when the LLC does not have enough property?
A1: In brief, yes.
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Q2: If so, how fast are they?
A2: This question I am unable to definitively answer.
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Personal Liability for All Owners
First, partners are personally liable for all business debts and obligations, including court judgments. This means that if the business itself can't pay a creditor, such as a supplier, lender, or landlord, the creditor can legally come after any partner's house, car, or other possessions.
There are a few exceptions to this personal liability. Some of the partners can have limited personal liability if the partnership is set up as a limited partnership. This is a partnership in which only the general partner, who runs the business, has personal liability, while the limited partners, who are basically passive investors, can lose no more than their stake in the partnership. Also, some states allow special limited liability partnerships (LLPs). More commonly, though, business people who are particularly concerned about personal liability choose to incorporate their business or operate as a limited liability company (LLC).
REFERENCE SOURCE:
http://www.nolo.com/legal-encyclopedia/partnership-basics-30072.html
Hopefully the information that I have provided will help you. Respectively, a positive rating is appreciated.