Accounting News and Notes

Atlanta CPA on Unpaid Personal Income Taxes, Trust Fund Assessments and the 100% Penalty

A Layman’s Guide to Understanding Tax Issues with the IRS

Understanding  the tax issues a taxpayer has with the Internal Revenue Service is the best first step to beginning to address old personal tax returns that are either unfiled or unpaid. This is true regardless of whether you have old personal tax return issues or have unpaid payroll tax reports. As withheld payroll tax reports or sales taxes monies due to the state are essentially trust funds. In general terms this means that funds are really not that of your own. For example, if your business has employees and withholds from an employee’s paycheck federal withholding, FICA or Medicaid taxes, these essentially “belong to the IRS” as they were deducted in trust and due to the IRS in accordance with rules and procedures relative to the payment of payroll taxes. Although initially these monies are initially solely due by the company only, these monies can be assessed by the IRS to the responsible signor, officer or authority who failed to collect and remit these monies to the Internal Revenue Service on a timely basis. When this process is activated by the IRS it is referred to as the 100% penalty as is assessable to the responsibility party or parties.

As a Body of Believers we are taught that fear is the beginning to understanding, and that understanding leads to opportunities to turn from our problems, repent  and then to move forward. Though we might want to be beyond our problems, like in our lives, we have to deal with the consequences of our action and to be able to aggressively work to address problem areas and to put them behind us. I believe in the axiom that either “we are to aggressively deal with tax problems or know that the IRS and their collection process will aggressively deal with us.”

Tax problems come in many varied forms and are cover many different segments of tax law including:

Unpaid Personal Income Taxes

When there are several years tax returns for which a individual or corporation have not yet prepared or filed, it is best to start with the oldest return and go forward. This will allow for tax issues that roll forward from year to year to be properly reflected. For all unfiled tax returns, care should be exercised as all refunds which are due that are over three years of age, by tax law, are forfeited while all unpaid tax returns continue to accrue penalties and interest.

Assessed Trust Fund/Unpaid Withheld Payroll or Sales Taxes

The Internal Revenue Service takes a dim view, and well it should, for those who collect trust monies and fail to remit them to the Service. At this point the IRS can collect either the monies from the corporation or partnership or the responsible party or parties. The IRS is well within its legal rights in  pursuing collection from all those deemed responsible. However after a debt is paid and satisfied by any party, then no collection efforts against the other parties involved would be warranted. Frequently in submitting an individual or personal Offer in Compromise, care should be taken to first determine and confirm that the monies and Trust Funds have been assessed personally.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta  CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 proudly serving Duluth, GA, Gwinnett County and Beyond.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisition/Sales, Forensic Accounting and Bookkeeping.

Related posts:

1. Understanding Back Taxes, IRS Tax Liens and Assessed Income Taxes www.HisCPA.com
2. Duluth CPA on Trust Fund Monies: Working with the IRS to Address Civil Penalties
3. Atlanta/Alpharetta/Norcross CPA Teaches Atlanta Taxpayers How to Address Unpaid Income Taxes/Back Taxes
4. Atlanta CPA on IRS Tax Problems: Back Taxes, Tax Liens, Offer in Compromise and Assessed Income Taxes
5. Alpharetta/Lawrenceville/Suwanee CPA Helps Taxpayers Understand Tax Penalty Assessment and the IRS Statute of Limitations on Collection of Unpaid Taxes… The IRS/Tax Representation Series

This entry was posted on Monday, April 6th, 2009 at 1:13 pm and is filed under Atlanta IRS Tax Problems & Offer in Compromise, Atlanta Tax Problems & Tax Advocacy, Trust Fund Assessments & the 100% Penalty.
Tags: Addressing Unpaid Taxes, Atlanta/Gwinnett CPA, Taxpayer's Guide to IRS Representation, Unpaid Personal Income Taxes. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.