by Fresh Start Tax | Aug 3, 2020 | Tax Help
The IRS Earned Income Credit Audit, Call Former IRS Agents, Since 1982.
There’s nothing worse than receiving a nasty gram from the Internal Revenue Service to find out they are going out audit parts of your tax return.
One of the favorite audits that are going on with IRS right now is the earned income credit.
That is happening because the abuse that’s going on with preparers taking the earned income credit to taxpayers that are not eligible.
The IRS is going crazy on the tax returns with the EIC.
If you are going through an IRS tax audit need help calls today and have former IRS agents who have a combined 100 years professional tax experience in working for the IRS defend your IRS tax audit.
.
Learn about the Tax Audit and what is required.
Your package to IRS should include a Form 886-H-EIC that lists all the different documents you can send to prove you may claim the EIC with one or more qualifying children.
You can send any combination of these documents to provide the information the IRS needs.
Look at the Schedule EIC you filed with your tax return and complete the following steps for each qualifying child listed:
1. you must prove you lived with your child in the U.S. for more than half the tax year:
a. If your child lived with you at the address shown on your notice, you need to send a document showing your child lived at that same address for more than half the tax year.
b. If you moved and you and your child lived at another address, you must send documents showing the same address for both of you for more than half the tax year.
c. If your child didn’t go to school, you can send in copies of medical records or a statement from a daycare provider.
d. If you need to get a statement from your child’s school, daycare or medical care provider, you can find templates here. Your school or provider can copy and paste the template to their letterhead to make sure all the required information is provided.
e. Don’t forget to check the Form 886-H-EIC for more examples of documents you can send.
f. If you can’t prove your child lived with you for more than half the tax year, you cannot get the EIC.
You must verify how you’re related to the child.
The child must be related to you in one of the ways listed on the Form 886-H-EIC.
The form gives examples of what to send to prove how you’re related.
If your child is age 19 years old or over, you must verify either that:
a. Your child was under age 24 and a full-time student for at least five months of the tax year (you can do this by sending copies of official school records), or
b.Your child is permanently and totally disabled (you can do this by sending a copy of one of the official documents shown on Form 886-H-EIC).
You must verify you, your spouse (if filing a joint return) and your child have a valid SSN:
a. To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA) by the due date of your 2019 return (including extensions).
b.Any qualifying child listed on Schedule EIC also must have a valid SSN by the due date of your 2019 return (including extensions).
You can only claim the EIC if your child lived with you for more than half the tax year in the United States. Your child must also be related to you in one of the ways listed on the Form 886-H-EIC, and be an eligible age.
Your child must meet all three of these requirements to qualify you for the EIC.
If you can’t show that your child meets all the requirements, you may still be eligible for the EIC without a qualifying child.
The IRS Dependents Test
The next item is the dependents you claimed. Your dependents are listed in the middle of the first page of your tax return. The Form 886-H-DEP lists all the documents or combination of documents you can use to prove you can claim each child listed as your dependent.
To claim a child as a dependent qualifying child, the child must have lived with you for more than half the tax year (the residency test), be related to you (the relationship test), be a certain age (the age test), and not have provided over half of his or her own support (the support test).
a. If each child listed on your Schedule EIC is the same child you claimed as a dependent, you can use the same documents you used to prove you may claim the EIC to prove the child met the tests for a dependent qualifying child. You don’t have to send in copies of the same documents or look for different ones. But, you must use the Form 886-H-DEP to see what information must be provided to verify that the child meets the support test.
The IRS Support Test
a. To meet the support test, the child can’t pay more than half of his or her own support.
b. You don’t need to send proof of support at this time.
If you received this CP75 notice, you claimed a child as a dependent qualifying child. If you find the child doesn’t meet the rules to be your qualifying child, you may be able to claim the child as a dependent qualifying relative. See the rules on the Form 886-H-DEP for a qualifying relative. If the child meets the rules, you need to send the documents listed on the Form 886-H-DEP for a qualifying relative.
The IRS Filing Status Requirement
The next item listed is filing status. Look at the first page of your tax return, the first line shows your filing status.
If you filed as head of household, you need to look at the Form 886-H-HOH that lists all the different documents or combination of documents you can send to prove that you may claim this filing status.
To file as head of household, you must pass three tests: the marriage test, the qualifying person test, and the cost of keeping up a home test.
First you must meet the marriage test:
a. If you were never married or you’re a widow or widower, don’t submit anything for the marriage test. Only submit documents for the qualifying person and cost of keeping up a home test.
b. If you’re still married and lived with your spouse at any time during the last six months of the year, you can’t file as head of household, unless your spouse was a nonresident alien at any time during the tax year. Instead, you must file either as married filing jointly or married filing separately.
c. If you were divorced or legally separated by December 31 of the tax year shown on your notice, you must send a copy of your divorce decree or separation papers.
d. If you’re still married but lived apart for the last six months of the tax year shown on your notice, you must send us documents, such as a copy of a lease agreement, showing you and your spouse lived at different addresses.
Next is the qualifying person test:
The documents you send for the EIC and to prove you had a qualifying dependent will show you meet this test. So, you don’t have to send us any more documents for this test.
The cost of keeping up a home test:
a. If you didn’t meet both the marriage and the qualifying person tests, you can’t file as head of household.
b. If you met both the marriage and the qualifying person tests, you must send documents showing you paid more than half the cost of keeping up the home that the qualifying person and you lived in for more than half the tax year.
Documents must show you paid more than half the household expenses, such as rent, utilities, groceries, repairs and maintenance. If the qualifying person was your parent, you did not have to live with your parent, but you must prove that you paid more than half of the cost of maintaining a home for your parent for the entire tax year.
c. If any other filing status other than head of household is used, no documentation is needed at this time.
Need help, call us today.
by Fresh Start Tax | Aug 3, 2020 | Tax Help
Need Tax Help For Your CP75 or CP75, A Notice Request Asking For for Supporting Documentation
This notice is basically telling you that IRS is auditing your tax return. This is generally not good news and it’s best to get professional tax representation unless your records are spot on and you feel you have all the records to sustain an IRS tax audit.
In this letter or notice/notice that you’ve received from IRS, they are letting you know that you must send documentation to close an existing examination that currently exists regarding some of your tax records.
IRS is basically asking for substantiation.
The last thing that you want to do is to ignore this notice.
It’s very important that the IRS hears from you by the date shown on your notice.
If you need more time to get all the requested information, please call us today and we can help defend your tax audit and get you the time you need.
This notice tells you EXACTLY what items on your tax return the IRS is auditing.
Here is what You Need to Know
a. At the top of the notice on the right side, we list the tax year that we’re auditing.
b. Any documents you send in need to cover the year we’re auditing.
c. Don’t send original documents. Only Send us copies.
The IRS Earned Income Credit Audit
The first item listed is the earned income credit.
Your package includes a Form 886-H-EIC that lists all the different documents you can send to prove you may claim the EIC with one or more qualifying children.
You can send any combination of these documents to provide the information the IRS needs.
Look at the Schedule EIC you filed with your tax return and complete the following steps for each qualifying child listed:
1. you must prove you lived with your child in the U.S. for more than half the tax year:
a. If your child lived with you at the address shown on your notice, you need to send a document showing your child lived at that same address for more than half the tax year.
b. If you moved and you and your child lived at another address, you must send documents showing the same address for both of you for more than half the tax year.
c. If your child didn’t go to school, you can send in copies of medical records or a statement from a daycare provider.
d. If you need to get a statement from your child’s school, daycare or medical care provider, you can find templates here. Your school or provider can copy and paste the template to their letterhead to make sure all the required information is provided.
e. Don’t forget to check the Form 886-H-EIC for more examples of documents you can send.
f. If you can’t prove your child lived with you for more than half the tax year, you cannot get the EIC.
You must verify how you’re related to the child.
The child must be related to you in one of the ways listed on the Form 886-H-EIC.
The form gives examples of what to send to prove how you’re related.
If your child is age 19 years old or over, you must verify either that:
a. Your child was under age 24 and a full-time student for at least five months of the tax year (you can do this by sending copies of official school records), or
b.Your child is permanently and totally disabled (you can do this by sending a copy of one of the official documents shown on Form 886-H-EIC).
You must verify you, your spouse (if filing a joint return) and your child have a valid SSN:
a. To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA) by the due date of your 2019 return (including extensions).
b.Any qualifying child listed on Schedule EIC also must have a valid SSN by the due date of your 2019 return (including extensions).
You can only claim the EIC if your child lived with you for more than half the tax year in the United States. Your child must also be related to you in one of the ways listed on the Form 886-H-EIC, and be an eligible age.
Your child must meet all three of these requirements to qualify you for the EIC.
If you can’t show that your child meets all the requirements, you may still be eligible for the EIC without a qualifying child.
The IRS Dependents Test
The next item is the dependents you claimed. Your dependents are listed in the middle of the first page of your tax return. The Form 886-H-DEP lists all the documents or combination of documents you can use to prove you can claim each child listed as your dependent.
To claim a child as a dependent qualifying child, the child must have lived with you for more than half the tax year (the residency test), be related to you (the relationship test), be a certain age (the age test), and not have provided over half of his or her own support (the support test).
a. If each child listed on your Schedule EIC is the same child you claimed as a dependent, you can use the same documents you used to prove you may claim the EIC to prove the child met the tests for a dependent qualifying child. You don’t have to send in copies of the same documents or look for different ones. But, you must use the Form 886-H-DEP to see what information must be provided to verify that the child meets the support test.
The IRS Support Test
a. To meet the support test, the child can’t pay more than half of his or her own support.
b. You don’t need to send proof of support at this time.
If you received this CP75 notice, you claimed a child as a dependent qualifying child. If you find the child doesn’t meet the rules to be your qualifying child, you may be able to claim the child as a dependent qualifying relative. See the rules on the Form 886-H-DEP for a qualifying relative. If the child meets the rules, you need to send the documents listed on the Form 886-H-DEP for a qualifying relative.
The IRS Filing Status Requirement
The next item listed is filing status. Look at the first page of your tax return, the first line shows your filing status.
If you filed as head of household, you need to look at the Form 886-H-HOH that lists all the different documents or combination of documents you can send to prove that you may claim this filing status.
To file as head of household, you must pass three tests: the marriage test, the qualifying person test, and the cost of keeping up a home test.
First you must meet the marriage test:
a. If you were never married or you’re a widow or widower, don’t submit anything for the marriage test. Only submit documents for the qualifying person and cost of keeping up a home test.
b. If you’re still married and lived with your spouse at any time during the last six months of the year, you can’t file as head of household, unless your spouse was a nonresident alien at any time during the tax year. Instead, you must file either as married filing jointly or married filing separately.
c. If you were divorced or legally separated by December 31 of the tax year shown on your notice, you must send a copy of your divorce decree or separation papers.
d. If you’re still married but lived apart for the last six months of the tax year shown on your notice, you must send us documents, such as a copy of a lease agreement, showing you and your spouse lived at different addresses.
Next is the qualifying person test:
The documents you send for the EIC and to prove you had a qualifying dependent will show you meet this test. So, you don’t have to send us any more documents for this test.
The cost of keeping up a home test:
a. If you didn’t meet both the marriage and the qualifying person tests, you can’t file as head of household.
b. If you met both the marriage and the qualifying person tests, you must send documents showing you paid more than half the cost of keeping up the home that the qualifying person and you lived in for more than half the tax year.
Documents must show you paid more than half the household expenses, such as rent, utilities, groceries, repairs and maintenance. If the qualifying person was your parent, you did not have to live with your parent, but you must prove that you paid more than half of the cost of maintaining a home for your parent for the entire tax year.
c. If any other filing status other than head of household is used, no documentation is needed at this time.
The American Opportunity Credit
The next section is the American opportunity credit.
If you claimed AOTC, you must complete Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits) (PDF) and send it with your tax return. Also, look for one or two entries on your tax return for the lines listing “Education credits” or “American opportunity credit.”
If your tax return shows you didn’t claim the credit, you don’t need to send documents to prove this credit.
If you claimed AOTC, the student claimed on your Form 8863 should have received a Form 1098-T, Tuition Statement (PDF). Schools are required to send this form to all eligible students unless an exception applies.
If the student didn’t receive this form and is eligible for AOTC, contact the school for the form.
If you received payments for education expenses from your employer, veterans’ educational assistance, or other benefits, you can’t claim these expenses for this tax credit.
You must subtract the expenses paid by these payments and benefits from your total tuition costs and other eligible expenses.
a. If you claimed AOTC, we need proof that each student listed on the Form 8863 (PDF) is eligible. The Form 1098-T (PDF) has the amount of qualified education expenses paid in box 1.
IRS will need a copy of that form.
b. If you had more expenses than the amount listed in box 1 of the Form 1098-T (PDF), we need canceled checks or receipts for fees, books, and supplies that were required for the course or courses.
If You Have Additional Items Listed
Your notice may have more items listed, such as the Premium Tax Credit or Schedule C income. First, let’s cover other important information you need to know.
If IRS Does Hear from You, you are in tax trouble
Make sure you mail or fax all the necessary documents by the date in this section. If you need more time to get all the documents ready, call us at the number listed on the top right part of the page.
But, if you review your return and your notice and realize you didn’t qualify for any of the items shown on your notice, don’t send anything. We’ll get back to you with an examination report after the deadline shown on your notice.
Response Form back to IRS
The last part of the notice is the response form. If you have documents proving you may claim one or more of the items listed, you need to complete the response form and either:
a. Fax the completed response form to us along with copies of the records, documents, and statements to the toll-free fax number on your notice.
b. Return the completed response form to us along with copies of the records, documents, and statements in the return envelope in your packet or to the address shown on the notice.
After IRS Receives Your Information
It takes at least 30 days to review the documents you send us. You don’t need to do anything until you hear from us.
If you sent us copies of documents that proved you were eligible for items you claimed on your tax return, we will send you a notice to let you know your audit is closed. If we held your refund, you should get your refund in eight weeks if you don’t owe other taxes or debts we’re required to collect.
If the documents you send don’t give us the information we need or only verify some of the items, we will send you an audit report.
The report will explain our proposed changes and show the amount of tax you owe or the corrected amount of any refund you may receive.
The Schedule C IRS Tax Audit
If your notice lists Schedule C (Form 1040 or 1040-SR) (PDF) income, look at Form 11652, Questionnaire and Supporting Documentation, Form 1040 or 1040-SR Schedule C (Profit or Loss from Business). It lists the documents you must send that support the income and expenses claimed on your Schedule C.
Review each line of this form and make sure you correctly answer every question. Return the Form 11652 with the requested supporting documents, such as copies of your business records, Form 1099-MISC (PDF), and your business license.
It is important to keep all documents used to complete your tax return.
The documents kept should include records supporting the income, expenses, deductions or credits you claimed, such as invoices, receipts, mileage logs, and checking account statements showing amounts paid, and any other proofs of payment.
The records should be well-organized to answer any questions when your return is selected for audit. The records supporting items on your tax returns should be kept for at least three years after filing your return.
When your return is selected for audit, you must send copies of your records that show the gross receipts and business expenses claimed on your Schedule C.
a. Gross receipts are the income from your business. Proof of your gross receipts includes cash register tapes, bank statements, bank deposit slips, receipt books, sales invoices, credit card charge slips, and Forms 1099-MISC.
b. Business expenses are the costs paid to carry on your business and proof of your expenses includes canceled checks or checking account statements which clearly show the expenses paid, cash register tapes, account statements, credit card sales slips, and invoices.
After you complete your response, look at the Form 11652 to make sure you included all the necessary information.
The IRS Premium Tax Credit
If your notice lists the Premium Tax Credit (PTC), look at the Form 14950, Premium Tax Credit Verification (PDF). This form lists what document or documents you need to submit to verify you qualify for this credit.
You must have health insurance through an exchange or marketplace to claim this credit. If you didn’t get your health insurance through an exchange or marketplace, you’re not eligible for the PTC and you don’t need to send any information to prove this credit.
If you bought your insurance through an exchange or marketplace, you must send copies of documents used to support any entries you have on Part 4, Allocation of Policy Amounts or Part 5, Alternative Calculation for Year of Marriage, on your Form 8962, Premium Tax Credit (PTC) (PDF). We need the document that lists who your plan covers.
This list is on your insurance enrollment form or on a statement from your insurance provider. If you paid insurance premiums, submit the proof of payment. This proof can be paid receipts, credit card statements, bank statements showing who was paid, or copies of both sides of your canceled checks.
You also must submit a copy of your Form 1095-A, Health Insurance Marketplace Statement (PDF). If you didn’t receive this form or you didn’t keep it, contact your plan administrator.
by Fresh Start Tax | Aug 3, 2020 | Tax Help
The IRS Trust Fund Penalty +How to WIN + Best Trust Fund Penalty Defense – Former IRS 1-866-700-1040
Winning the trust fund penalty cases is an art.
You must understand the protocol that IRS works under.
We are comprised of tax attorneys, CPAs, and former IRS agents, managers and tax instructors.
We have over 100 years of directly working for the Internal Revenue Service in the local, district, and regional tax offices of the Internal Revenue Service.
We have worked hundreds and hundreds of trust fund recovery penalties when working for the Internal Revenue Service.
Not only have we asserted the penalties as former IRS agents we also have on staff former appeals agents who completely understood the government’s position.
As a result of our years of experience we know the loopholes and certain defense arguments and strategies.
How to save yourself from the Trust Fund Recovery Penalty
The Trust Fund Recovery Penalty (TFRP) is a penalty provided by IRC 6672 against any person required to collect, account for, and pay over taxes held in trust who willfully fails any of these activities. The penalty is equal to the total amount of tax evaded, not collected or not accounted for and paid over to the Government.
The penalty is applicable for many types of taxes, but the most common application of the TFRP is for unpaid employer’s taxes on Form 941.
The TFRP is not dischargeable in bankruptcy.
The trust portion of the employment taxes (Form 941) consist of the amount of withholding for the Federal Income Tax and for Social Security. The only way to fully protect yourself from the application of the TFRP is to always pay these taxes to the Government, even if you don’t have the funds for any other expenditure. Don’t forget, the amounts withheld are not yours, you are holding those funds in trust for the Government!
For the assertion of the Trust Fund Recovery Penalty (TFRP), the IRS must establish that a person is “responsible” and also “willfully” failed to collect or pay over the trust fund taxes to the government.
Potential “responsible” persons include:
1. Officer or employee of a corporation.
2. Partner or employee of a partnership.
3. Corporate director or shareholder.
4. Employee of a sole proprietorship.
5. Surety lender.
6. Other person or entity outside the delinquent business organization.
A “responsible” person has:
1. Duty to perform.
2. Power to direct the act of collecting trust fund taxes.
3. Accountability for and authority to pay trust fund taxes.
4. Authority to determine which creditors will or will not be paid.
To determine whether a person has the status, duty and authority to ensure that the trust fund taxes are paid, the IRS considers the duties of the officers as set forth in the corporate by-laws as well as the ability of the individual(s) to sign checks. In addition, the IRS determines the identity of the individuals who:
1. Hire and fire employees.
2. Exercise authority to determine which creditors to pay.
3. Sign and file the employment tax returns.
4. Control payroll/disbursements.
5. Control the corporation’s voting stock.
6. Make federal tax deposits.
Factors to consider as to “responsibility” include;
1. Whether the person had the ability to exercise independent judgement with the financial affairs of the business.
2. If a person is an officer or owns stock in the corporation, this cannot be the sole basis for “responsibility.”
3. If a person has the authority to signs checks, the exercise of that authority does not, in and of itself, establish “responsibility.”
Willfulness, this is the tough part!!!!!
“Willfulness” means intentional, deliberate, voluntary, reckless, knowing, as opposed to accidental. No evil intent or bad motive is required.
To show “willfulness,” the IRS must show that a “responsible” person was aware, or should have been aware, of the outstanding taxes and either intentionally chose not to pay the taxes or was plainly indifferent that the taxes needed to be paid.
A “responsible” person’s failure to investigate or correct mismanagement after being notified that withholding taxes have not been paid satisfies the TFRP’s “willfulness” element. The payment of of net wages (wages minus the trust fund taxes) to employees when funds are not available to pay withholding taxes is a “willful” failure to collect and pay over under the trust fund taxes.
The payment of wages to employees over the government constitute “willfulness.”
If the IRS can show that you paid other creditors or directed others to pay other creditors after you became aware of the unpaid trust fund taxes, you have met the “willfulness” element for the application of the TFRP.
Again, for the assertion of the TFRP, the IRS must establish that a person is “responsible” and also “willfully” failed to collect or pay over the trust fund taxes to the government. Thus, you would first argue that you are not a “responsible” person; and if that fails, you will argue that you did not “willfully” fail to pay the trust fund taxes. You must keep in mind that the courts have favored the IRS in the application of the TFRP.
If you were the sole shareholder, president and director of your corporation and had check signing authority; the TFRP will be applied against you for the trust fund taxes. You are liable, end of issue.
The escape application for the Trust Fund Penalty
You have a chance to escape the application of the TFRP penalty when the IRS determines that you are a “responsible” person due to one specific factor and nothing more.
If the IRS determined that you are a “responsible” person because you had check signing authority and nothing more, you can argue you that you were given check signing authority for the mere convenience of your employer.
You can explain that other individuals also had check signing authority. You will need to show that you had nothing to do with payroll.
You will need to obtain affidavits from other employees of the corporation stating that you had nothing to do with the finances of the corporation.
If the IRS determined that you are a “responsible” person because you were a shareholder of the corporation and nothing more, you can argue that you were a mere investor in the business and not involved in the day to day operation of the business.
You will need to show that you were not on the business premises. Again, you will need to obtain affidavits from the employees of the corporation to collaborate your position.
The Responsible person under 6672 of the Code
If the IRS determined that you are a “responsible” person because you were a director of the corporation and nothing more, you can argue that you had nothing to do with the operation of the business. You will need to obtain the corporate records to show when you were the director and what was discussed at the board of director’s meetings.
You will need to show that you were not on the business premises. Again, you will need to obtain affidavits from the employees of the corporation to collaborate your position.
If the IRS determined that you are a “responsible” person because you were related to a “responsible” person and nothing more. You will argue that you had nothing to do with the day to day operation of the business.
Again you will have to obtain affidavits from the employees of the corporation stating that you were not on the business premises and had nothing to do with the day to day operation of the business and not an owner or director of the business.
If the IRS determined that you are “responsible” person because you are a shareholder (but not the sole shareholder), were an employee and had check signing authority; you will need to argue that you had no decision making authority. You will need to describe your duties as an employee and obtain affidavits from other employees that you were not involved in the day to day operations of the business.
If the IRS determines that you are a “responsible” person solely due to one of these factors, stock ownership, check signing authority or employment status; you will need to show that you had no authority over the financial affairs of the corporation. You will need to obtain affidavits from the employees of the corporation to collaborate your position.
If the IRS determines that you are a “responsible” person due to a combination of factors, such as stock ownership, check signing authority or employment status; you will need to show that you had no authority over the financial affairs of the corporation.
You will need to obtain affidavits from the employees of the corporation to collaborate your position. With more factors against you, it will be more difficult for you to prove that you are not a “responsible” person.
Once the IRS has determined that you are a “responsible” person and you can not persuade the IRS that you are not a “responsible” person; you will need to show that you did not “willfully” fail to pay the employment taxes.
If you paid other creditors after you became aware of the unpaid trust fund taxes, you have “willfully” failed to pay the employment taxes.
On the other hand, if you made these payments because you were threatened with physical harm by the owner or director of the corporation, you can argue that you did not “willfully” fail to pay the employment taxes.
Again you will need to prove your position with affidavits from the employees of the corporation and a police report to show physical violence.
In conclusion, if you are a non-owner employee of a corporation and do not want to be held liable for the TFRP; as soon as you become aware of the unpaid employment taxes, you need to inform the officers and directors of the corporation in writing of the problem and don’t sign any more corporate checks.
If your are given the choice of either paying other creditors or being fired; the choice is yours with consequences. If you pay the other creditors, you have “willfully” failed to pay the employment taxes.
If the taxes are not paid soon, you resign your position from the corporation and make your resignation in writing.
Further, if you were an officer and/or director of the corporation, you make sure that the public corporate records reflect that you no longer have these positions with the corporation. This may seem harsh, but this is the safest way to save yourself from the TFRP.
by Fresh Start Tax | Jul 28, 2020 | Tax Help
How to Defend the IRS Trust Fund Penalty Problems, Former IRS Agent, Revenue Officer
As a former IRS agent and teaching instructor with the Internal Revenue Service I have worked well over 750 trust fund cases.
Many people get caught with there pants down because they have no idea the IRS can transfer this penalty against you as an individual if you are found responsible for the IRS trust fund.
You must defend yourself against this penalty is much as possible.You must understand that this has severe personal ramifications against you and therefore you must pull out all resources you have a fight off trust fund problems.
I have been on both sides of the fences, for the Internal Revenue Service as a former IRS revenue officer, I set up the deficiencies for the trust fund and being on the other side of the fence I put together solid tight packages for IRS trust fund defense penalty help.
The IRS trust fund penalty defense is an art and it’s a very important that you understand the ramifications of the IRS trust fund penalty.
If the IRS sets up this tax deficiency against you, IRS has its full legal resource to enforce and collect back taxes as though you owe individual taxes and therefore it must be taken seriously.
You can expect letters from the Internal Revenue Service that will threaten IRS tax levies,wage garnishment, and federal tax liens.
So, it’s best to stop this proceeding by understanding how to defend yourself against the IRS trust fund penalty.
The bottom line here is to FIND SOMEONE TO BLAME and support with DOCUMENTATION WINS!
In putting your case together, you need to have documentation supporting your claim.
It’s critical to support your claim with Internal Revenue Service with written affidavits from third parties explaining why you are not responsible for this tax.
The revenue officer will gather as much possible information from as many sources as they can to make a determination.
The use of the IRS form 4180 by the RO is very critical to investigation. You must know the form and the questions the IRS will ask, so be prepared.
The RO determines many things including the business financial policy. As a Former IRS agent I took massive amounts of these 4180 interviews.
The RO will ask a series of questions on the form that will start to point to the responsible persons. Page 2 is critical.
Keep in mind, along with the answers and facts and the documentation is king.
IRS will look closely at those who filed and review tax returns, who signed the checks, sign contracts, who signed for loans, who made day-to-day decisions, who paid the bills, who decides what bills not to pay, and who ran the show.
The RO can contact former employees, bank officers, anybody they can find to interview, the secretary is a great source of information.
The principal factor that the IRS considers when examining which individuals may or may not be liable for the TFRP is, who signs company checks.
Now, may times others have signed checks but IRS is looking for ultimate control.Who had the power, who had control.
As we say in IRS, follow the money and you will find the responsible & WHO HAD CONTROL.
In defending responsible persons, it is critical to demonstrate that a person lacked the financial control exhibited by the foregoing factors through such things as company business records, involving the business, contracts, and affidavits from third parties, and providing statements to the IRS.What you are proving is that someone was controlling and directing you.
You must build your own case that you were being controlled of directed by others.
The IRS Revenue Officer.
The TFRP investigation is conducted by a revenue officer from the IRS’s collection unit. The revenue officer typically requests bank signature cards, cancelled checks, corporate resolutions and other business records to identify potential responsible persons.
If the company does not provide these documents voluntarily, administrative summons, a form 2039 will be used to demand the records from the business, banks or from third parties.
The RO usually will follow up with a call or simply send out forms to the company indicating who is responsible, the agent will try to set up as many persons and they can and throw an broad net around everyone.
Lastly, get as many people as you possibly can to support you. everybody will blame everybody else so get ready for a battle and get ready to fight.
If you have been assessed this penalty, by all means, appeal.
DO NOT GET CAUGHT WITH YOUR PANTS DOWN, FIGHT!
