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“IRS TRUST FUND RECOVERY PENALTY

(100% PENALTY)”

AFFIDAVITS IN SUPPORT OF ABATEMENT REQUEST

Below are affidavits submitted in the sample case study which requested abatement of an erroneously assessed Trust Fund Recovery Penalty against a spouse who, signed checks, held corporate "titles" in name only, and signed corporate documents.  A Request for Abatement was pursued since a Collection Due Process "hearing"  resulted in an adverse determination, and the clock for filing in Tax Court was running.

 A full abatement was achieved in this case and the need for a Court proceeding was avoided. But the time frame was very tight (don't do this without tax counsel). 

(See Caution Warning below-consult legal counsel)

"Mrs. Wife" - Affidavit 

AFFIDAVIT OF 

[Mrs. Wife] 


[ Mrs. Wife], being duly sworn, deposes and says that the following is within her personal knowledge and is true and correct to the best of her knowledge and belief, except as to those matters which are herein stated upon my information or belief, and as to those matters I believe it to be true.

1. I had invested some of my inheritance into [ Corporation]. Thereafter, I loaned money and made personal guarantees for corporate debts. I did these things because I was asked to do so by my husband, [Mr. Husband]. I never received any stock certificates as I had been promised. Further, my investment was passive only. I was never an employee of [ Corporation ], and never received a pay check from the company.

2. At some point in time, my husband, [Mr. Husband] told me that another person had resigned as Secretary / Treasurer of [Corporation] and that he wanted me to become such. I told my husband that I didn't want anything to do with this. [Mr. Husband] and I argued about it. I was told that all I had to do was "take minutes" and that it was just a formality. I became an "officer" in name only. I never undertook any duties as Secretary, Treasurer or otherwise. I never received any corporate bank statements. I never reconciled any bank statements, and didn't even have possession of any corporate checking account or checks. I was not provided any corporate records. As an accommodation only, I would periodically sign checks when no one else was available; however, in all such instances the checks were pre-approved by an actual officer of the company (I didn't have the authority to sign any checks without such pre-approval). My being a signatory was done solely as an accommodation to my husband, [Mr. Husband]. At no time did I have any actual authority to determine what creditors were to be paid or not paid. I was never even provided a listing of any payables of the company.


3. On or about [      ], I wrote a letter advising that I resigned from my "in name" positions only - of Secretary / Treasurer. My husband and I were continuing to fight about the money I had invested into, loaned to, and/or guaranteed on behalf of [Corporation]. I repeatedly told my husband that I wanted my money back, but I was told that such was not possible. I told my husband that in my view   [Mr. X] (the President) had lied about the profit potential of this business and that [Mr. X ]  was only selling my husband a "bill of goods". My husband wouldn't listen to me. He continued to ignore me, just as in the past. We had constant battles. I only wanted my money back - the money which I had inherited. Even after writing out my resignation from what were nothing more than "in name only titles", my husband had me sign some papers (relating to loans, guarantees, foreclosure etc...). I merely signed what he told me to sign, without reading or understanding. He assured me that signing these papers would - fix everything.

At no time did I have any actual authority concerning [Corporation]. Things I did sign, were done in response to my husband telling me where to sign. Papers were prepared and I was told where to sign. I was not involved in the management or operations of [Corporation] and had no authority. In retrospect, I was merely a source of money. 

4. As I recall, the first time I learned about any "unpaid payroll taxes" was approximately the time that the Federal Revenue Officer appeared at the office. I had come in from another other company that I was working with (both were in the same building). It was just before this time that I recall that my husband, [Mr. husband], was very upset. I had asked him what was wrong. In the past when I asked [Mr. husband] about how things were going, he had refused to tell me anything, or he would merely say everything was okay (in short, I was shut off). However, this time, he told me that the company was behind on payroll taxes. Upon learning this, I remember yelling at [Mr. Husband], and saying words to the effect, you have lost all my money. [Mr. Husband] responded with words to the effect - I am sorry, I didn't mean to hurt you. At such time, I understood from [Mr. Husband] that [Corporation] was closing down and that it did so very shortly thereafter.

The foregoing is true under penalty of perjury under the laws of the State of California.

Dated: __________________.

[Mrs. Wife], an individual

"Bookkeeper" - Affidavit

 
AFFIDAVIT OF 
[Bookkeeper]


[Bookkeeper], being duly sworn, deposes and says that the following is within her personal knowledge and is true and correct to the best of his knowledge and belief, except as to those matters which are herein stated upon my information or belief, and as to those matters I believe it to be true.

1. I am a residence of [            County], California. During the period from approximately [            through         ], I was employed as a bookkeeper for [Corporation]  hereinafter, "        "). I worked on a full-time basis for [Corporation].

2. My duties with [Corporation] included: accounting for all payables and receivables, financial statement preparation, processing of payrolls, preparation of checks for signing as authorized and directed by corporate officers, reconciling bank statements and other accounting functions. I took directions and instructions directly from the following actual officers of the company:   [Mr. X ],   [Mr. Y ] and [Mr. Husband]. I didn't have any check signing authority and had no authority to determine which creditors were to be paid or not paid. All determinations as to which creditors were to be paid or not paid were made by one of the above three (3) officers (   [Mr. X ],     [Mr. Y]     or    [Mr. Husband]  ).


3. During my time as an employee of [Corporation],  [Mrs. Wife]   was not an employee and never received any pay check. On a periodic basis, [Mrs. Wife] would be asked to sign a check; however, such was done only after any such check had been pre-authorized by an actual officer of the company. Further, such instances were limited to situations where another check signer was not available and there was no one else to sign. [Mrs. Wife] worked with another company located in the same building as [Corporation], and thus, such procedure could be used. Further, I understood during my time as an employee that [Mrs. Wife] held a "title" as an officer of [Corporation]; however, any such designations were in actuality mere "titles" as [Mrs. Wife] had no actual authority within [Corporation], she did not exercise any authority or perform any actual job functions. [Mrs. Wife] never gave me any instructions or directions concerning [Corporation] matters. 

4. [Mrs. Wife] didn't receive any corporate bank statements, didn't reconcile any corporate bank accounts, and was not involved in any payroll, did not have possession of the corporate bank accounts or checks, was not involved in accounting, was not involved with income or payables, record keeping or otherwise involved in the running or management of [Corporation].  [Mrs. Wife] was not involved in determining what creditors were to be or not paid, as such authorizations and approvals came from one of the actual three (3) officers ([Mr. X] , [Mr. Y] or [Mr. Husband]).

The foregoing is true under penalty of perjury under the laws of the State of California.

Dated: __________________.

[Bookkeeper], an individual

 A Word of Caution. Proper factual and legal analysis is required. Affidavits and arguments must be made after all pertinent documentation and facts are reviewed by legal counsel. If you make  statements which are not correct, such can destroy your credibility and your case. Moreover, false statements in an affidavit can result in charges for perjury. Lay persons do not understand and/or appreciate the legal significance of various actions and documentation. For the most part, persons do not remember dates and time lines correctly. Legal counsel must compare a client's "memory time line" to the actual documentation. Legal counsel must review these matters, and determine the appropriate recommendations. It is upon the verified facts that legal counsel can then start to build the legal arguments.

 

 

 

The above limited information is intended for informational purposes only.  If legal advice or other expert assistance is required, the services of a competent professional should be sought, and this general information should not be relied upon without such professional assistance. 

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