Offer In Compromise-Payroll Tax

[Sabre]

I have a single member LLC that owes payroll taxes, mainly form 941. The wife has good W-2 income and do not want to file separately or take the innocent spouse route. All prior OIC's I have done were for income tax and not payroll taxes. Anyone care to share their experiences with this.

[JON]

Oic

He has been assessed the penalty for the trust funds I have never used OIC. If they have always been filing jointly I think your a little late.? OIC may work.. Good luck...

[DaveO]

Only the LLC owner owes the trust fund penalty and it can't be collected from his wife unless she is determined to be a responsible party. The IRS will consider her income when determining allowable household expenses.

Also, only the trust fund portion can be assessed against him. The employer matching funds, penalty and interest can't be collected from him.

[ChEAr$]

You can bet your bottom dollar that IRS will take any refund from an income tax return with his name and number on it.

And if he's still in business, an OIC will be hard to come by; I mean REALLY hard.

[JohnH]

Interesting thing about the Trust Fund Penalty, although most clients don't want to hear this. It certainly isn't good financial planning, but if he's the sole owner and the business shuts down, it may actually be cheaper for him than paying both the withheld and matching taxes, even allowing for non-deductibility of the TFP.

As for the OIC, I'm betting it will be very hard to get approved unless he's truly destitute. The IRS gets really cranky about payroll taxes, and that's as it should be, since he's essentially engaged in the theft of his employees' withholding taxes. (The government wants to steal it all themselves - they don't like sharing the loot)

[JON]

OIC - Minnesota

Here in Minnesota a taxman made an appointment to go and review OICs that have been processed locally (a class had said you could). He was given a number (Carol Smith in MN) and she set up a time and gave him the directions. He arrives and is taken to a room and in comes an IRS employee with a box. The employee says if you want more I will bring you more and sits down to read a book, he has to remain in the room. He reviews the information by case, there is nothing blocked out, names, addresses are all there. He said he was shocked at the settlements - that there were a bunch settled for $.10-$.25 on the dollar. I gave up on OIC when the formula driven settlements were tough to argue with. I actually have thought that the collections people were quicker and easier to deal with.

If there is any joint property it will be considered theirs by the IRS. The business is closed down and the old LLC member is unemployed or underemployed. The other thing noted by reviewing cases is there were installment agreements on some with a three year term.

[ChEAr$]

Here in Minnesota a taxman made an appointment to go and review OICs that have been processed locally (a class had said you could). He was given a number (Carol Smith in MN) and she set up a time and gave him the directions. He arrives and is taken to a room and in comes an IRS employee with a box. The employee says if you want more I will bring you more and sits down to read a book, he has to remain in the room. He reviews the information by case, there is nothing blocked out, names, addresses are all there. He said he was shocked at the settlements - that there were a bunch settled for $.10-$.25 on the dollar. I gave up on OIC when the formula driven settlements were tough to argue with. I actually have thought that the collections people were quicker and easier to deal with.

Wait a minute. Just what kind of "taxman" got an appointment at IRS to review OIC's?
Doesn't sound like another IRS employee; someone from the state dept of revenue?
a local tax yokel? Tax preparer? nawww..

Please elucidate.

[JON]

Carol Smith

is a local IRS person, but the looking at what was actually filed was information given at a seminar(IRS). The Contact to arrange the meeting was Carol. He called her went to the location and could have stayed all day, with an IRS employee reading the book while he went through OICs, evidently I assumed for the 8th District. He said he was surprised that none of names were blocked out. He had requested the most recent cases. He had to go to offices in St. Paul, but he was trying to decide if he should be attempting OIC and after his reviewing decided he should file a few.

[ChEAr$]

is a local IRS person, but the looking at what was actually filed was information given at a seminar(IRS). The Contact to arrange the meeting was Carol. He called her went to the location and could have stayed all day, with an IRS employee reading the book while he went through OICs, evidently I assumed for the 8th District. He said he was surprised that none of names were blocked out. He had requested the most recent cases. He had to go to offices in St. Paul, but he was trying to decide if he should be attempting OIC and after his reviewing decided he should file a few.

My real question was "who was he"? another IRS person or a tax professional like us?
If the latter, was the information furnished under the FOIA?

I would hate to think just anybody could walk into an IRS office and get to see this information.

[WhiteOleander]

My real question was "who was he"? another IRS person or a tax professional like us?
If the latter, was the information furnished under the FOIA?

I would hate to think just anybody could walk into an IRS office and get to see this information.

I took a course in OIC a long time ago. Back sometime in the 90's. One thing that was stressed was that all the financial info submitted to get the OIC is open for public inspection. This includes all their assests and liabilities, etc. It was advised that we make sure our client is aware of this. I can't remember exactly how it was phrased, but the reason was something about since the gov't had accepted less than what was legally owed, the public had a right o see why.
So, in theory, if your worst enemy knew you did an OIC, he/she could legally go see everything you filed.

[JON]

Anyone can review all the information

Yes, it is the FOIA that is why you call ahead to arrange it. So anybody can get the information!! I do not think it is limted to who can review. You do not have to be a CPA to do it. Request and sign and you can sit in the room to review for as long as you want. He said the IRS employee stays in the room while you review. In his case the employee had a book to read.

[New York Enrolled Agent]

Yes, it is the FOIA that is why you call ahead to arrange it. So anybody can get the information!! I do not think it is limted to who can review. You do not have to be a CPA to do it. Request and sign and you can sit in the room to review for as long as you want. He said the IRS employee stays in the room while you review. In his case the employee had a book to read.

I was under the impression that exception #6 in the FOIA law would not allow the release of any personal taxpayer information. Can either you or W.O. provide a cite that allows the disclosure of taxpayer information?

[WhiteOleander]

I was under the impression that exception #6 in the FOIA law would not allow the release of any personal taxpayer information. Can either you or W.O. provide a cite that allows the disclosure of taxpayer information?

No, this was something that was in the course I took. And I don't even have te text any longer.

[JON]

Carol Smith(Minnesota)

is the local IRS representative that he contacted to set up the appointment and she gave him the place and time. All that was blacked out were the social security numbers. It showed all the information as to the offers, counter acceptence and rejections. It does not give any of the explanations as to how/why the IRS decided as it does, but does show all the numbers. If you go to tax court records they are public record including the theories that support them. There is no "why" explained in the offers and compromise just offer, reoffer and accept/reject. I am sure your local IRS rep would get you in contact with the right offices. It is not a secret.

[Zee]

Any IRS employee that allowed another to review documents identifying the taxpayers would be fired immediately. IRS policy do not allow such practices. Frankly, this story sounds like an "urban legend" to me.