Question on Rapid appeals of Trust Fund Recovery Penalty Assessment

Asked over 2 years ago - Los Angeles, CA

Got a personal lien for a payroll tax as an officer of a corp. Went through IRS appeals and appeals officer gave me a suggestion. The Rev officer never noticed me with Letter 1153. I filed a FOIA request 60 days ago and they can't find the letter.

She said there's an expedited way to get the lien removed: Pay one quarter of employee's tax and then file for a refund through form 843. That then secures the trust fund recovery file and will determine if the assessment is valid. At the same time file a 656-L OIC Doubt as to Liability form which goes straight to appeals board.

Anyone have any comments on this and if you think it will work (in theory)? Need lien removed within 60 days.

Attorney answers (3)

  1. Phillip Monroe Smith

    Contributor Level 18

    8

    Lawyers agree

    Answered . I agree with Mr. Collins. You need to secure counsel and get some good tax advice. The IRS is currently backlogged wtih OIC's. I could take years to get a decision on an OIC and the lien would not be released until then if at all.

    It also makes not legal, logical or tax sense that you would pay a quarter of the tax, get a refund and also get a lien release.

    Phillip M. Smith Jr.
    Los Angeles Tax & Business Attorney
    Licensed before the United States Tax Court
    Call: 323-292-4116

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can... more
  2. Jeffrey Anton Collins

    Contributor Level 10

    7

    Lawyers agree

    Answered . By far the most expedited approach would be to have your tax attorney dispute the due process of the collection action. Then, you have a right to petition the Unites States Tax Court, where you can litigate the matter and resolve within a year. But in the meantime, your attorney can arrange a withdrawal of the lien, until the litigation is complete.

    As far as the other suggested tactic, there is actually no IRS procedure that will follow that series of processes. Therefore, it is unlikely that you'll get the desired result, because the "next" IRS personnel that sees your file will have no directives, and therefore no direction. In my opinion, that approach will waste time, and you'll miss your opportunity fto petition the Tax Court.

    PLUS, in Tax Court, you don't have to prepay the tax. Seriously, find a tax lawyer. Even if from outside your area. Find someone that understands tax procedure.

    IRS CIRCULAR 230 DISCLOSURE NOTICE: IRS Circular 230 regulates written communications about federal tax matters... more
  3. E. Martin Davidoff

    Pro

    Contributor Level 15

    7

    Lawyers agree

    Answered . I view this issue a bit differently. As a first step, you should get advice as to whether or not you are liable for trust fund penalties. If, ultimately, you will be, why fight that aspect? If you are liable, you would then deal with the collection aspect with the many alternatives that are available.

    Now, assuming you are probably not liable, the two approaches have actually been offered by the appeals officer.

    1. Pay the one quarter and seek a refund; or

    2. File for the Offer in Compromise.

    One of the other attorneys offered a third alternative. That was to dispute the collection action through a collection due process hearing. That may not be available to you at this time depending upon the procedural history of the case.

    A fourth alternative is to work through the Taxpayer's Advocate office.

    To determine which of the four to use, you should consult with a seasoned tax attorney who regularly uses all four alternatives and is fully familiar with these tools.

    Our office is available to do such consultation over the phone.

    Good luck.

    Marty

    Marty Davidoff, emd@taxattorneycpa.com, 732-274-1600. This answer is provided for general information only. You... more

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