by Fresh Start Tax | Jan 20, 2013 | Owe Payroll Taxes
Trust Fund Taxes – Owe, Settle, Appeal – Former IRS Agents 1-866-700-1040
Contact us today for free tax consultation and you will speak directly to Tax Attorneys, CPAs, or former IRS agents, managers and/or instructors.
We have over 206 years of professional tax experience in over 60 years working directly with the Internal Revenue Service and the local, district, and regional office of the IRS.
We have worked hundreds upon hundreds of trust fund cases both as former employees of the IRS, and private practice and with one of the highest-rated tax resolution firm’s, Fresh Start Tax LLC
Because our of our vast experience with the Internal Revenue Service we know all the tax codes, tax policies, and tax settlement procedures to go ahead and get you the results on your particular case.
Free Assessments
When you contact us, we will review the facts of your case and give you a free assessment regarding the outcome of your case.
Fresh Start Program
Under the new fresh start program IRS is now accepting offers in compromise that never before would’ve gone through their settlement program. As a general rule because of the new formulas instituted by Internal Revenue Service with this new fresh start program taxpayers are saving up to 75% more than they have done in the past.
Under the current Fresh Start initiative the IRS has incorporated its Streamlined Offer in Compromise process into the overall investigation of offers and has added flexibility to the financial analysis used in evaluating offers.
The Streamlined Offer in Compromise process includes:
a. Fewer requests for additional financial information,
b. If necessary, requests for additional information by phone, not by mail
c. Greater flexibility when considering your ability to pay
The changes to financial analysis add more flexibility to the OIC process including:
1. Greater flexibility in determining the equity in assets,
2.Greater flexibility in determining the allowable living expenses,
3. Reducing the amount of future income included in the offer,
4. Decreased time frame to complete the OIC payment process to two years.
To settle a trust fund case you will need to fill out form 433 OIC which you can find on our website and form 656. If you are questioning the tax assessment completely you will have to fill out tax forms 656-L
If the Internal Revenue Service set up a tax assessment against you as being responsible officer under code section 6672 of the Internal Revenue Code, and you wish to file a claim or appeal on that assessment contact us today as we are true experts in the appellate area of trust fund taxes.
Former IRS Appeal Agent on staff.
On our staff is a former IRS appeals agent who started out as a revenue agent and for the next 25 years worked in the appeals function of Internal Revenue Service working hundreds and hundreds of trust fund penalty cases.
Current under Trust Fund Investigation
If you are under current investigation for a trust fund tax penalty IRS is going to be asking you to fill out form 4180 which you can find our website. As a former IRS agent I would caution you to be extremely careful in giving IRS any answers to form 4180 without professional tax advice. there are certain trick questions on that form. If you going to proceed and fill that form out by yourself my advice to you is this:
“If you are not sure of any answer any question is in your best interest to always write unknown.”
Most TFRP cases involve officers of corporations. However, a responsible person may be one or more of the following:
1. an officer or employee of a corporation
2. a member or employee of a partnership
3. a corporate director or shareholder
4. a related controlling corporation
5. Payroll Service Provider (PSP)
How IRS determines who is responsible for the trust fund penalty.
1. Who directed or authorized payments of bills to creditors,
2. Who had the right to open and close bank accounts for the business,
3. Good guarantee or cosign loans for the business,
4. Who signed or could cosign checks,
5. Who authorized payroll, who is authorized to make federal tax deposits.
6. Who filled out payroll tax form 941,
7. Who prepared reviewed or signed or transmitted payroll tax returns to the IRS or to the accountant,
8. Who had the right to hire or fire employees,
9. Who made sure other bills were paid other than the IRS,
1o. If you were to ask the employees of the company who in fact ran the business who would they point to,
11. Who ran day-to-day operations of the business.
You will find most of these questions on form 4180 that every revenue officer is instructed to be in their file before any trust fund case is closed. you can call me today and I can give you much more insight into trust fund cases.
While this is not an all-encompassing list of who is responsible for the trust fund taxes of a company or corporation, this would give the revenue officer out the local office of a good idea to look.
Trust Fund Taxes – Owe, Settle, Appeal – Former IRS Agents
by Fresh Start Tax | Jan 18, 2013 | Owe Payroll Taxes, Trust Fund Tax / Payroll Taxes
Owe Back Taxes, Payroll or Trust Fund – New Settlement Program – Former IRS Agents 1-866-700-1040
If you owe back taxes including payroll or trust fund taxes call us today and find out about the new settlement program offered by Internal Revenue Service.
Fresh Start Program
This new program is called the fresh start program instituted by IRS approximately 6 months ago.
It gives taxpayers who owe back tax a fresh opportunity to go ahead and settle their tax debt with the IRS. The fresh start program specifically addresses installment agreements, federal tax liens and the IRS settlement procedure called the offer in compromise.
No matter how much you owe the IRS there are different programs and tax options that are available for you.
Contact us today and speak directly to a tax attorney, CPA or former IRS agent, manager, or former IRS instructor.
You will be afforded a free tax consultation and you will be hearing the truth about the tax debt that you owe Internal Revenue Service.
With the new settlement program you will have to submit to IRS a financial statement that will have to be fully documented and you will have to make sure all your tax returns are current and up-to-date.
If you owe back payroll tax and you are currently in business it is in your best interest to start making current tax deposits and make sure all your current 941s are filed and up-to-date with Internal Revenue Service .
When the IRS knows that a corporation or entity is in current compliance with monthly FTD depositories they are much more likely to work with the company or said corporation.
Regarding the trust fund penalty of IRS
If the IRS has sent you form 2751 or has already sets up the trust fund penalty against you there are other options that you have is well.
If you’re in the process of being assessed for the trust fund penalty find out below the guidelines and the benchmarks of who IRS determines may be responsible for the tax.
Most TFRP cases involve officers of corporations.
However, a responsible person may be one or more of the following:
1. an officer or employee of a corporation
2. a member or employee of a partnership
3. a corporate director or shareholder
4. a related controlling corporation
5. a Payroll Service Provider (PSP)
IRS will also require form 4180 to be completed by every officer of the Corporation. For review of that form you can go to our website or our the homepage under IRS forms. You can click on and download form 4180.
As a former IRS agent that was one of the key forms that were used to determine the trust fund penalty responsibility
Contact fresh start tax today at 1-866-700-1040-and speak directly to an attorney, CPA and/or former IRS agent or manager.
We are rated A+ by the Better Business Bureau and we have worked thousands of cases.
We will go over all your tax options with you and we will make sure you go through this process worry free.
Owe Back Taxes, Payroll or Trust Fund – New Settlement Program – Former IRS Agents
by Fresh Start Tax | Jan 16, 2013 | Owe Payroll Taxes
Owe Back Tax – Railroad Retirement, Excise, Payroll Taxes – Former IRS Agents
If you will owe back payroll taxes, 941 taxes, or trust fund taxes, railroad retirement or excise tax call Fresh Start Tax LLC today and we can offer you a free consultation on how to completely resolve this matter. We are tax experts in this area.
On staff are tax attorneys, CPAs, and former IRS agents and appeals officers. We have over 205 years of professional tax experience in over 60 years of working directly for the IRS in the local, district, and regional offices of the Internal Revenue Service.
Whether you are in business or just worried call us today to hear the best advice on how to bring your case to a peaceful resolution.
Payroll taxes,Excise and Railroad Retirement Taxes are an IRS priority
IRS especially considers payroll taxes part of the trust fund tax family. IRS considers these payroll taxes a priority since the taxes are really not a direct tax but monies that are held in trust by a company or corporation that has not been turned over IRS. So the highest priority is given collecting trust fund money.
Good Advice
If you are currently in business the best advice we can give you being former IRS agents is to make sure you are at least current for the week, month or current quarter. When IRS sees that your current they are more than likely to offer you a payment plan.
Payroll Taxes in Trust Fund Cases
It also should be known that these payroll taxes spawn off trust fund taxes . The Trust Fund tax is a result of nonpayment of 941 payroll taxes.
As a result IRS will impose under section 6672 of the IRC code an assessment against those responsible for paying the payroll taxes. This trust fund tax comprises of all the withholding in one half of the employee Social Security.
The responsible persons are not responsible for the employers part of the Social Security, the penalties, the interest or the unemployment taxes.
The position of the IRS
To encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for the TFRP.
The Trust Fund Recovery Penalty
These taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount.
The TFRP may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business. The business does not have to have stopped operating in order for the TFRP to be assessed.
Responsible for the Trust Fund Cases
The Trust Fund may be assessed against any person who:
a. is responsible for collecting or paying withheld income and employment taxes, or for
b. paying collected excise taxes, and
c. willfully fails to collect or pay them.
A Responsible Person
A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes.
This person may be:
1. an officer or an employee of a corporation,
2. a member or employee of a partnership,
3. a corporate director or shareholder,
4. a member of a board of trustees of a nonprofit organization,
5. another person with authority and control over funds to direct their disbursement, or
6. another corporation or third party payer.
Willfulness for Trust Fund
For willfulness to exist, the responsible person:
a. must have been, or should have been, aware of the outstanding taxes and
b. either intentionally disregarded the law or was plainly indifferent to its requirements.
Using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of willfulness.
How IRS conducts there investigation
You may be asked to complete an interview ( form 4180 can be found on our website )in order to determine the full scope of your duties and responsibilities.
Responsibility is based on whether an individual exercised independent judgment with respect to the financial affairs of the business.
An employee is not a responsible person if the employee’s function was solely to pay the bills as directed by a superior, rather than to determine which creditors would or would not be paid.
Figuring the Trust Fund Amount
The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on:
a. The unpaid income taxes withheld, plus
b. The employee’s portion of the withheld FICA taxes.
For collected taxes, the penalty is based on the unpaid amount of collected excise taxes.
Assessing the Trust Fund
If the IRS determines that you are a responsible person, IRS will provide you a letter stating that we plan to assess the TFRP against you. ( Trust fund recovery penalty )
You will have 60 days (75 days if this letter is addressed to you outside the United States) from the date of this letter to appeal our proposal. The letter will explain your appeal rights.
Caution
Once the IRS asserts the trust fund penalty, IRS can take collection action against your personal assets. If these taxes are not paid IRS has the right to send out bank and wage levy garnishments as well as filing the federal tax lien.
Remember if you owe back taxes including the railroad retirement, excise or payroll taxes is in your best interest to contact IRS before they start any action against you.
Owe Back Tax – Railroad Retirement, Excise, Payroll Taxes – Former IRS Agents
by Fresh Start Tax | Jan 15, 2013 | Owe Payroll Taxes
Owe Back Payroll Taxes – New Program for Settlements- 1-866-700-1040
We are comprised of tax attorneys, CPAs, and former IRS agents. We have over 206 years of professional tax experience and over 60 years of working directly for the Internal Revenue Service in positions as agents, managers and instructors.
We taught tax law at the IRS.
If you owe back payroll taxes there are many remedies and solutions available to you that you are currently not aware of.
It would be in your best interest to contact fresh start tax for free tax consultation and hear the truth and find out the best remedy on how to settle the current case that you have. 1-866-700-1040.
We can offer fresh tax solutions to you that can keep your business open and running for years to come.
If you are not under current audit you may want to look into the voluntary classification settlement program if you have any issues and concerns about your employees that are on your current payroll.
IRS is formed special teams of agents to conduct payroll tax and employment tax audits. If this is a situation you are now in, contact us and we can discuss the situation with you and possibly avert any IRS issue.
The three most common solutions for owing back payroll taxes is for the IRS to go ahead and enter into an installment payment agreement, put you business in a current hardship if your current financial statement warrants that, or file for a IRS tax settlement called an offer in compromise.
It is in your best interest to make sure that all your tax returns are filed currently and you are making current tax deposits so you can be shown in the best light to Internal Revenue Service.
As a former IRS agent I can tell you specifically that if you are current with your current payroll tax deposits IRS will generally work a deal with you so it is in your best interest to make all timely tax deposits.
Voluntary Classification Settlement Program (VCSP)
The VCSP is a voluntary program that provides an opportunity for taxpayers to reclassify their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes.
Participation in the program
To participate in this voluntary program, the taxpayer must meet certain eligibility requirements and apply to participate in the VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.
The VCSP allows eligible taxpayers to obtain relief similar to that currently available through the Classification Settlement Program for taxpayers under examination.
This was done to:
a. Permit a taxpayer under IRS audit, other than an employment tax audit, to be eligible to participate in the VCSP,
b. Clarify the current eligibility requirement that a taxpayer who is a member of an affiliated group within the meaning of section 1504(a) is not eligible to participate in the VCSP if any member of the affiliated group is under employment tax audit,
c. Clarify that a taxpayer is not eligible to participate if the taxpayer is contesting in court the classification of the class or classes of workers from a previous audit by the IRS or Department of Labor and,
d. Eliminate the requirement that a taxpayer agree to extend the period of limitations on assessment of employment taxes as part of the VCSP closing agreement with the IRS.
The VCSP is available for taxpayers who want to voluntarily change the prospective classification of their workers.
This program applies to taxpayers who are currently treating their workers or a class or group of workers as independent contractors or other non employees and want to prospectively treat the workers as employees.
Consistent treatment
A taxpayer must have consistently treated the workers as independent contractors or other non employees, and must have filed all required Forms 1099 for the workers to be reclassified under the VCSP for the previous three years to participate.
You cannot be under a current tax audit
The taxpayer cannot currently be under employment tax audit by the IRS and the taxpayer cannot be currently under audit concerning the classification of the workers by the Department of Labor or by a state government agency.
If the IRS or the Department of Labor has previously audited a taxpayer concerning the classification of the workers, the taxpayer will be eligible only if the taxpayer has complied with the results of that audit and is not currently contesting the classification in court.
Exempt organizations and government entities may participate in VCSP if they meet all of the eligibility requirements.
VCSP Agreements
A taxpayer participating in the VCSP will agree to prospectively treat the class or classes of workers as employees for future tax periods.
In exchange, the taxpayer will:
Pay 10 percent of the employment tax liability that would have been due on compensation paid to the workers for the most recent tax year, determined under the reduced rates of section 3509(a) of the Internal Revenue Code.
Owe Back Payroll Taxes – New Program for Settlements – Former IRS Agents
by Fresh Start Tax | Jan 14, 2013 | Owe Payroll Taxes
Owe Employment, Payroll Taxes – 941, 943, 944 – File and Settle with IRS
If you owe employment or payroll taxes call us today to work out a tax settlement with the Internal Revenue Service.
We are comprised of attorneys, CPAs and former IRS agents who have over 60 years of working directly with the Internal Revenue Service.
We can submit an IRS power of attorney, contact the Internal Revenue Service so you will never have to speak with them and work out a sensible arrangement so you can continue your normal business activities.
IRS will require a detailed financial statement with complete documentation and also they are going to want to make sure that all 941s, 943’s at 944’s are filed and that you are making current deposits.
If you are having a current financial crisis IRS has the ability to put your case into a current tax hardship. you also have the option of entering into an installment payment agreement with the IRS or submitting an offer in compromise or an IRS tax settlement.
With one simple phone call to fresh start tax you will know everything you need to know to make a prudent business decision moving forward.
As a caution please be advised that IRS can set up a trust fund tax penalty against the individuals or persons responsible for paying trust fund or employment tax. We can go over all the details and options for you so you can go through this process worry free.
Determining Whether the Individuals Providing Services are Employees or Independent Contractors
Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be –
a. An independent contractor
b. An employee (common-law employee)
c. A statutory employee
d. A statutory non employee
In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.
Common Law Rules
Facts that provide evidence of the degree of control and independence fall into three categories:
1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)?
Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor.
Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor.
There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.
The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.
Form SS-8
If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker.
The IRS will review the facts and circumstances and officially determine the worker’s status.
Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).
Miscalculation of Employees
Consequences of Treating an Employee as an Independent Contractor
If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply).
Relief Provisions
If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker.
To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977.
Misclassified Workers Can File Social Security Tax Form
Workers who believe they have been improperly classified as independent contractors by an employer can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.
Voluntary Classification Settlement Program
The Voluntary Classification Settlement Program (VCSP) is a new optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat their workers (or a class or group of workers) as employees.
To participate in this new voluntary program, the taxpayer must meet certain eligibility requirements, apply to participate in the VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.
Owe Employment, Payroll Taxes – 941, 943, 944 – File and Settle with IRS
by Fresh Start Tax | Jan 10, 2013 | Owe Payroll Taxes, Representation, Tax Help
Owe IRS Trust Fund Taxes – Let Former IRS Agent Resolve, Settle
Call us today and speak directly to Tax Attorneys, CPAs, or former IRS agents. We are tax specialists in the quick resolution of IRS trust fund taxes. If you owe back trust fund taxes or in need of filing in a Appeal we can help.
All initial consultations are free. 1-866-700-1040.
Trust fund taxes are a special breed of taxes are owed to IRS. They are comprised of unpaid payroll taxes. When IRS collects the trust fund penalty IRS is seeking a payment comprising of the withholding tax and one half of the Social Security tax not paid on 941 payroll tax returns. This usually results in a tax saving about 40%.
There are multiple tax defenses to go ahead and defend the assertion of the trust find taxes or civil penalties levied or imposed by Internal Revenue Service.
Trust Fund Recovery Penalty Assessments
The trust fund recovery penalty, applicable to withheld income and employment (social security and railroad retirement) taxes or collected excise taxes, will be used to facilitate the collection of tax and enhance voluntary compliance.
If a business has failed to collect or pay over income and employment taxes ( 941) , or has failed to pay over collected excise taxes, the trust fund recovery penalty may be asserted against those determined to have been responsible and willful in failing to pay over the tax.
A Key Point
Responsibility and willfulness must both be established.
The withheld income and employment taxes or collected excise taxes will be collected only once, whether from the business, or from one or more of its responsible persons.
Collection of the withheld income and employment taxes or collected excise taxes is achieved when the Service’s right to retain the amount collected is established.
Determination of Responsible Persons for the Trust Fund Taxes.
Tax Responsibility is a matter of status, duty, and authority.
Those persons performing ministerial acts without exercising independent judgment will not be deemed responsible.
In general, non-owner employees of the business entity, who act solely under the dominion and control of others, and who are not in a position to make independent decisions on behalf of the business entity, will not be asserted the trust fund recovery penalty.
How IRS determines who is responsible for the trust fund penalty.
1. Who directed or authorized payments of bills to creditors,
2. Who had the right to open and close bank accounts for the business,
3. Good guarantee or cosign loans for the business,
4. Who signed or could cosign checks,
5. Who authorized payroll, who is authorized to make federal tax deposits.
6. Who filled out payroll tax form 941,
7. Who prepared reviewed or signed or transmitted payroll tax returns to the IRS or to the accountant,
8. Who had the right to hire or fire employees,
9. Who made sure other bills were paid other than the IRS,
10. If you were to ask the employees of the company who in fact ran the business who would they point to,
11. Who ran day-to-day operations of the business.
While this is not an all-encompassing list of who is responsible for the trust fund taxes of a company or corporation, this would give the revenue officer out the local office of a good idea to look.
Non Profit Trust Fund Cases Cases
The trust fund penalty shall not be imposed on unpaid, volunteer members of any board of trustees or directors of an organization referred to in section 501 of the Internal Revenue Code to the extent such members are solely serving in an honorary capacity, do not participate in the day-to-day or financial operations of the organization, and/or do not have knowledge of the failure on which such penalty is imposed.
in order to make accurate determinations the IRS will weigh all relevant issues and should be thoroughly investigated.
Non assertion of the Trust Fund Penalty
An individual will not be recommended for assertion if sufficient information is not available to demonstrate he or she was actively involved in the corporation at the time the liability was not being paid.
This shall not apply if the potentially responsible individual intentionally makes information unavailable to impede the investigation.
IRS Field investigations to determine the trust fund recovery penalty liability will be conducted promptly to enhance access to relevant information and reduce burden to taxpayers.
Absent statute considerations, assertion recommendations normally will be withheld in cases of approved and adhered to business installment agreements and bankruptcy payment plans. To the extent necessary, information will be gathered to support a possible assessment in the event the agreement is defaulted.
Application of Payments in Determining Trust Fund Recovery Penalty Assessments
Effective for assessments where notices of TFRP liability are issued on or after June 19, 2000 and for any undesignated payment made on or after January 1, 2003)
Any payment made on the business account is deemed to represent payment of the non trust fund portion of the tax liability (e.g., employer’s share of FICA) unless designated otherwise by the taxpayer.
The taxpayer, of course, has no right of designation of payments resulting from enforced collection measures.
To the extent partial payments exceed the non trust fund portion of the tax liability, they are deemed to be applied against the trust fund portion of the tax liability (e.g., withheld income tax, employee’s share of FICA, collected excise taxes).
Once the non trust fund and trust fund taxes are paid, the remaining payments will be considered to be applied to assessed fees and collection costs, assessed penalty and interest, and accrued penalty and interest to the date of payment.
Small Business Administration regarding Assertions of the Trust Fund.
When employees of the Small Business Administration perform duties in accordance with the regulations of the agency, the Service will not consider assertion of the liability provided by IRC 6672 or 3505 against those Small Business Administration employees in any past, current or future cases arising out of these duties.
A footnote should be added about the assertion of the trust fund penalties.
The local revenue officers have tremendous power in determining who is and who is not responsible for these trust fund taxes. I would tell anybody working on their own case if you do not like the decision from the local revenue officer to make sure you contact the manager in the local office.
IRS will issue a form 2751 if in fact you are held responsible for the trust fund tax.
You have a 60 day right to appeal that starts from the date of the letter from the Revenue Officer.
Call us today for free tax consultation and we will review your case.
