Question Help please...IRS, Letter of Compromise RE: Payroll Taxes.

[NanaOf11]

**Not sure where to post this as it really is after BK but there is no section that applies?? **

I am soooo incredibly nervous about this IRS business. Much more nervous than the BK!!

We have a lawyer, tough no non-sense kinda guy with an outstanding record in dealing w/IRS. He is demanding and hard to talk with (Probably needs to be!) but again has the best reputation in our area for negotiating & WINNING big with these guys. Kind of reminds me of looking for a brain surgeon, you put up with the poor bedside manners for the skill in the profession!!

We know we have a tough case being Payroll taxes, $30k plus interest & penalties.

Met with him briefly before our ch7, making sure our timing was right to wait until we received our discharge.

HELP PLEASE...I have several questions for anyone that might have been down this road with these guys.

We have heard their standard allowances are tougher than BK schedule "J" ?

Our home was NOT reaffirmed, can they put a lein on it? It was IIB.

What are they looking for on our bank statements? Consistency will not be there as we were just discharged a few weeks ago & our funds were frozen during part of the past few months by the CU.

How do we come up with a payment amt?

We have retirement and SSDI. Can they take the disability amt? Do we count it on the 656 & 433A forms?

Am I nervous for no reason???

I am going to bounce this off you guys and leave "Brutus" to deal with the Feds

Thanks

[last2cents]

Nana, I have a few questions about your situation:

#1 - What was the structure of the company? Corp (S or C), LLC, Partnership or sole prop?

#2 - Has the IRS filed a lien? If so, against who? The company or you personnally?

#3 - Why were the payroll taxes not paid? Did you funnel that money elsewhere to keep the business operating? Or did it just never materialize?

#4 - Is the company still operating?

#5 - Are there state tax issues as well?

#6 - Is the 30K a mix of withholding, withheld SS & Medicare as well as employer portions - or is it all of one type?

[NanaOf11]

#1 - What was the structure of the company? Corp (S or C), LLC, Partnership or sole prop? S Corp (Dissolved now)

#2 - Has the IRS filed a lien? If so, against who? The company or you personnally? Yes, the corp but we assume it will be forthcoming personally as well
#3 - Why were the payroll taxes not paid? Did you funnel that money elsewhere to keep the business operating? Or did it just never materialize? Young business, economy caused investor to back out, took Peter to pay Paul, to keep us afloat a few more months.
#4 - Is the company still operating? NO, assets sold/seized, Corp dissolved.

#5 - Are there state tax issues as well? Yes and No, (BK ch 7) covered our responsibility

#6 - Is the 30K a mix of withholding, withheld SS & Medicare as well as employer portions - or is it all of one type? Mix but all payroll

[HHM]

1. Yes, the IRS is quite the stickler on the standards. If you are above standards you need to be able to prove it, and even they, they may not allow it.

2. Yes, they can place a lien. But if there is no equity, it won't really matter.

3. Payment amount is income, minus allowed expenses.

4. There are no exemptions for tax debt, so yes, they can garnish SSDI. Yes, it does count on 433-A and 656.

Realize, since this was an S-Corp, you will only be held personally liable for the principal tax. Withholding, Medicare and Employees contribution to SS. You will not be liable for the employers contribution to SS and the accumulated penalties and interest. So, that right there, will reduce the debt to some degree.

Which option is best for your Payment plan or OIC will be determined by your attorney.

[NanaOf11]

Well it is just me & hubby, $6k monthly income. Both of us on SSDI, his Military retirement and my disability retirement as well..

Where can I find these standards? I googled it but didn't have much luck.

Since our home was IIB & not reaffirmed can we still use that mortgage amt or must we use the standard? Real bummer if they place a lien as we were hoping to modify or refi in the future, but this seems to be a very long process. Rumor has it that this might really take 24mo to hear from them after we submit the package?

What about our reaffirmed debt like our autos? Not much equity because of cross-collateralization.

I searched the archives and found very little info. One post I did find had a comment/term I did not understand... "non-tolling of SOL" I am pretty sure it was left by HHM, what does this mean?

Thanks guys, anxiety is better just talking about all this

Who started this board anyway?? Where do I send the cookies

Anyway....What a relief just to have you guys around

[HHM]

Sounds like your attorney is leaning towards an Offer in Compromise. Those can take up to 24 months. But on average, take about 8-12 months.

Do a google search for IRS Collection Standards.

http://www.irs.gov/individuals/article/0,,id=96543,00.html

Note, they are the same standards used for bankruptcy Means Test

The fact that debts were or were not reaffirmed, etc, does not matter.

Cross collateralization does not create zero equity. The IRS will still view it as
Auto 1, Value - amount owed = equity
Auto 2, Value - amount owed = equity
If there is any equity, that gets factored into your Offer in Compromise

Tolling of SOL.
SOL = Statute of limitation
Tolling means that the Statute of limitation stopped running.
The IRS has 10 years to collect a tax debt (from the date of assessment). If you file an Offer in Compromise, doing so stops the clock. (It tolls it).