ATTORNEY

CONTACT  TaxSOS 

  1-866-482-9707

TAX BLOG  

Offer in Compromise IRS  Levy and Wage Garnishments Franchise Tax Board
Innocent Spouse Installment Agreements Trust Fund Penalty

 

“IRS TRUST FUND RECOVERY PENALTY

(100% PENALTY)”

A sample case study  is presented below showing partial correspondence (Legal counsel letters, and affidavits). Request was made for 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)

Letter 1

[date]

Via FAX - [                    ]   (total pages, including this page = [    ])
Telephone: [                    ]
Internal Revenue Service 

Attention: [         ], Group Manager

Regarding Taxpayer:   [Mrs. Wife]         (SS NO: [         ])

Civil Penalty - 100% Penalty (             )
Erroneous Assessment 
Request for Abatement
Request for non filing of Federal Tax Lien

Dear Mr. [         ]:

I appreciate your willingness to review the taxpayer’s request for abatement in the above matters as per our telephone conversation of  [      ]. 

You advised that you are going to obtain the IRS files. In response I left a voice message advising you that I believe that the IRS file is with IRS Appeals Office in [           ]. We have discussed that the taxpayer recently had a “Collection Due Process Hearing”; however, the Appeals Officer refused to consider any discussion about lack of liability at the “hearing”. The Appeals Officer likewise refused to consider the affidavit of  [Mrs. Wife] (Exh A)  as well as the  affidavit of [Bookkeeper] (Exh. B)

I have advised the IRS that it was only recently that the testimony of  [Bookkeeper] was able to be obtained (I understand that she was previously ill). Ms. [Bookkeeper] was the full time bookkeeper for the corporation involved and her testimony shows that [Mrs. Wife] was not a responsible person under IRC Section 6672. This evidence corroborates the testimony of  [Mrs. Wife].

You had asked me what the relationship was as between [Mrs. Wife]  and [Bookkeeper]. In response, I made inquiry from my client.   [Mrs. Wife] advised me that she is merely an acquaintance of  [Bookkeeper]. They were introduced while [Mr. Husband] worked at [Corporation]. My client advised that she does not socialize with [Bookkeeper], has not had [Bookkeeper] over to her home, and that they do not go out to dinner. 

I hope we can resolve these matters shortly in light of the 30 day period running with respect to the Collection Due Process Notice of Determination.

I look forward to hearing from you and will respond to your questions.

Thank you.

Very truly yours,


A. Nathan Zeliff
Attorney at Law

ANZ:eaa 
cc: client (w/enclosures)

Letter 2

Link to Affidavit - "Wife"    and  Affidavit - "Bookkeeper"

[     ]

Via FAX - [          ]      (total pages, including this page =[       ])
Telephone: [           ]
Internal Revenue Service 

Attention: [                ], Group Manager

Regarding Taxpayer:
[ Mrs. Wife]       (SS NO: [       ])

Civil Penalty - 100% Penalty (        )
Erroneous Assessment 
Request for Abatement
Request for non filing of Federal Tax Lien

Dear Mr. [       ]:

I appreciate your willingness to review the taxpayer’s request for abatement in the above matters.

In response to our telephone conversation, I have attached the following documents which I have copied from the IRS Response to Freedom of Information Request (as requested by you):

1. Report of Interview (form 4180) - [Mrs. Wife]     (Exh. [       ]);

2. Report of Interview (form 4180) - (name of person interviewed was removed by IRS) (Exh. [   ]);

3. Report of Interview (form 4180) (name of person interviewed was removed by IRS) (Exh. [   ]); and

4. Appeals Case Memo (Exh. [    ])

I have drawn a dark “BLACK” vertical line next to areas I would like to direct your attention to (some of which we previously discussed).

I believe that the documentation shows that [Mrs. Wife] held “titles” in name only and that she was in fact not a “Responsible Person” who “willfully” failed to pay employment taxes. With all due respect, the Appeals Case memo contains many conclusionary statements which are without support. Moreover, the Revenue Officer has not properly set forth the actual statements of [Mrs. Wife].  [Mrs. Wife] did not authorize payments. She had NO check signing authority, had no authority to determine which creditors were to be paid or not paid; and in instances where checks were signed, her signing was allowed only for checks which had been “pre-authorized by an actual officer of the company”. ([Bookkeeper] Affidavit, Par. 2 and 3). 

The Affidavits of [Mrs. Wife] and [Bookkeeper] show that [Mrs. Wife] had no actual control, and didn’t know about unpaid payroll taxes until the corporations demise. It was at the “end of the trail” that [Mrs. Wife] learned that her husband had lost all of her money. By that time, it would be clear to even a stranger that there were unpaid taxes -- the IRS Revenue Officer is present demanding payment and saying taxes weren’t paid; the wife (]Mrs. Wife]) has finally been told by her husband that everything was not “okay” (a departure from his normal pattern of ignoring his wife); and with [Mrs. Wife] confronting her husband with extreme distress - “you have lost all my money” ([Mrs. Wife Affidavit, par. 4). Even more compelling (from the standpoint of testimony from a third party who has first hand knowledge of the facts) is the testimony of the bookkeeper who reported daily to the actual decision makers of the corporation. The testimony of [Bookkeeper] (bookkeeper) clearly shows that [Mrs. Wife] was not involved with the operations of the corporation and had no actual control at all. The Requirements of “willfulness” and “responsibility” are simply not met.

It is conceded that [Mrs. Wife] succumb to the pressures of her husband to take on corporate “titles” in name only and to “sign” various documents (e.g., relating to loans, guarantees, foreclosures, etc...). She was “told” to sign without reading or understanding. Was such a “smart” thing for her to do? Of course not. But, such doesn’t render [Mrs. Wife] liable for unpaid Trust Fund Taxes. The bookkeeper ([       ]) identifies the persons who made the business decisions and controlled the corporation. [Mrs. Wife] is not among them. Moreover, even the Appeals Case Memo (Exh. [      ]) states:

“Neither [Mrs. Wife], [Mr. Husband] nor [Mr. X] identified her on their Form 4180 as performing any of the activities usually associated with persons who have significant control over the financial affairs of the company, except check sighing. Even then, only [Mrs. Wife] identified herself as a person who signed checks, and, of the 60 checks in the administrative file, only one is signed by [Mrs. Wife].”

As to “check signing” the Affidavit of [Bookkeeper] clearly shows that “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.” ([Bookkeeper] Affidavit, Par 3). [Mrs. Wife] was not involved in determining what creditors were to be paid or not paid ([Bookkeeper] Affidavit, Par. 4).

[Mrs. Wife] lost her inheritance monies and has already paid a heavy price. Justice does not require, and is not served, by targeting this lady for a debt for unpaid Trust Fund Tax obligations for which she is neither responsible nor for which she voluntarily and intentionally failed to pay over.

I would like to discuss these matters with you upon your review, and look forward to hearing from you.

Thank you.

Very truly yours,


A. Nathan Zeliff
Attorney at Law

ANZ:eaa 
cc: client (w/enclosures)

Letter 3

[     ]

Via FAX - [       ]    (total pages, including this page =1)
Telephone: [     ]
Internal Revenue Service 

Attention: [           ], Group Manager

Regarding Taxpayer:  [Mrs. Wife]     (SS NO: [         ])

Civil Penalty - 100% Penalty (      )
Erroneous Assessment 
Request for Abatement
Request for non filing of Federal Tax Lien

IRS AGREEMENT TO ABATEMENT OF 100% PENALTY

Dear Mr. [        ]:

This will confirm our telephone conversation of [         ] during which you advised that you are requesting the IRS to abate in full all trust fund penalty assessments against [Mrs. Wife]  in re  [Corporation].

I sincerely appreciate your willingness to review the taxpayer’s request for abatement and information provided. 

Thank you for all of your assistance.

Very truly yours,


A. Nathan Zeliff
Attorney at Law

ANZ:eaa 
cc: client

 
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 properly. 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. 

TO MAIN PAGE

 

 
 
           
SERVING CLIENTS  NATIONWIDE

RESOURCES

CONTACT  TAXSOS  

TOLL FREE: 

1-866-4-TaxSOS

IRS levy  -  Help

 

1-866-482-9707

PUT OVER 30 YEARS OF TAX

IRS Collection Forms 

 

1-866-482-9767

PROBLEM SOLVING EXPERIENCE

IRS Collection Standards 

Telephone:

1-530-474-3267

ON YOUR TEAM

Tax Issues & Resources
     
 

©  A. Nathan Zeliff           Disclaimer