Accounting News and Notes

Duluth CPA Illustrates Including the 100%/Civil Penalty When Addressing IRS Representation Issues & an Offer in Compromise

When you are readying yourself for IRS Representations Issues, Getting an Installment Plan Established, or when submitting an Offer in Compromise it is prudent to be aware of have already assessed to the taxpayer any and all 100%/Civil Penalties so that your Taxpayer Advocate/CPA does not have to handle critical and essential tax issues twice. Below is a sample of a letter that might be used to have the IRS assess the responsible taxpayer penalty to ensure that all monies “are on the table” and that otherwise addressable issues do not spoil an otherwise positive IRS representation experience. For example, finding there are other unpaid taxes will void an Offer in Compromise, Installment Plan and a payment strategy to address otherwise potentially solvable issue.

Internal Revenue Service

Cincinnati, OH 45999-0013                     

RE: ABC Company, Inc., FEI # 00-0000000 

Enclosures: Power of Attorney 

Dear Sir or Madam, 

I am writing you in a good faith attempt to come to terms over the above taxpayers’ present predicament with the IRS and to request that all unpaid payroll taxes of the company for all periods and years be assessed to the Mr. ______________ SS # ________________ as a Civil Penalty as they are the sole responsible party.

ASAP after these monies are assessed I plan to  submit an Offer in Compromise on their behalf.  I am willing/eager to supply you with any information that you might need in order expedite assessment of the 100% Penalty/Civil Penalty.

Also when you are assessing these monies please send to me  copies of all assessments while ensuring that we have a list of all outstanding payroll taxes for the company. 

Please cease all collection efforts while the 100% Penalty is being assessed and please do not hesitate to contact me should you have any questions. 

Sincerely, John C. Dillard, CPA, PC, Partner in Charge 

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html  

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

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, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Duluth CPA on Trust Fund Monies: Working with the IRS to Address Civil Penalties

If your company has employees or collects sales tax, the dollars withheld from payroll and sales taxes collected are technically withheld “in trust.” Accordingly they have legal exposure to both the company for payment, as well as those personally responsible parties who knew about and controlled such payments. The  responsible party is generally defined as those who were most/responsible for payments that would well extend to check signers, accounts payable, officers, and financial staff. This assessment is for one personally who collected trust monies which they unduly did not remit to the appropriate taxing/legal authority. As these monies are withheld in trust, they do not belong to the company/business. The IRS and individual states take a very dim and stern view of all those who unduly use their money. The 100% penalty may be assessed to the responsible parties making them personally responsible for any collected and unpaid trust fund monies. Having served as a CPA in Metro Atlanta for decades getting behind in the payment of your company’s payroll taxes is the fastest way to financial ruin and is essentially the illegal conversion of IRS/State Trust Monies to unauthorized use.

When a  business is not able to pay its staff payroll taxes/remit collected sales taxes as due, it is a clear warning side that the business model is upside down. Many times it would indicate that the margins of a business are not adequate to support the business’ present staffing levels and overhead, it could also be an indicator that the business is not properly leveraged/financed. In either case it is cause for drastic action that will most likely result in an immediate change in staffing levels and consideration to immediately close the business. A business cannot sell itself out of a problem, these options are most always the best course.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

Contact HIS CPA PC (A Christian CPA Firm) today.

Award Winning Atlanta CPA

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

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, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

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.