Payroll Taxes

[TAX]

Client owes payroll taxes and related penalty and interest. All togather it is about $50,000.

Is there a way to settle one time with IRS for less amount. If yes, how low can you go?

Thanks!

[ChEAr$]

Do that math

Client owes payroll taxes and related penalty and interest. All togather it is about $50,000.

Is there a way to settle one time with IRS for less amount. If yes, how low can you go?

Thanks!

Work up the figures for both an IA and an OIC and see if it's worth it. If person still in
business, it goes without saying that IRS will consider an IA, but not an OIC.
Remember that IRS won't consider an OIC if they can get more in the long run.

No matter how some of those national outfits try to puff it up.

[Jay Lode, CPA]

Likely not, but depends upon facts and circumstances. My reply isn't so "technically correct" as it is based on practical experience, but in past I have had success in pleading the client's ignorance and received abatement of the portions of penalties.

Many business owners are not skilled in nuances of payroll administration and truly make honest mistakes without even knowing ramifications. And if it truly was an honest oversight, I have no problem in arguing that case for the client. Finding a win-win outcome.

I have found that the IRS also likes to know what the client is doing to prevent occurance of problems in the future.

Hope this helps.
Jay

[oceanlovin'ea]

One instance

I had a client who was behind in payroll taxes. It really was not her fault. Her children were running the business. So she thought they were doing all the things they were supposed todo.
The CPA firm she used then prepared the reports and gave them to the client's son who never sent them in or the money either.
We went to the IRS office. At that time I was not an enrolled agent and had not prepared the returns but they allowed me to be in the room with her. Since she had property (the restaurant and her home free and clear), they told her to go take out a mortgage or line of credit on her home and pay up. They didn't care that she was a 75 year old woman either.

So I tend to agree that if the business is still operating they might work out payments but they are going to want all their money.

Linda F

[John of PA]

Pratitioners Hotline

You can try calling the Pratitioners Hotline and ask if they can put you in touch with someone who can discuss a possible settlement without going through the Offer in Compromise program.