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Tax LawTax collector want to close my business down. I was a corporation, which is the entity that owes the IRS money for one year taxes about 30K. I closed that business. With a BK Attorney I filed CH 13, which does not protect the corporation but supposedly protects me personally (I was sole owner). Tax collector wants to go after me as the officer of corp. I have two CPA's and BK Atty to meet with tax man- He wants all the money. Personally I have no assests. Attorney answers (2)
Reputation Level 11
Answered about 4 years ago.
Chapter 11 Bankruptcy Attorney in Seattle, WA.
When you say "all the money" it is not clear what money you are talking about. If there are still assets in the corporation, those assets will be available to pay your creditors, and there is no reason the IRS would not expect to be paid by the corporation. If you are in a Chapter 13, you should be making payments to the IRS under the terms of the plan, assuming that they have already assessed personal liability for the taxes. Most taxes are not discharged in bankruptcy. Moreover, it is possible to have personal liability for taxes owed by the corporation, particularly payroll taxes or sales taxes, often referred to as "trust fund" taxes. It sounds like you have a team of professionals working for you already, and you should probably rely on their advice. Sometimes, clients don't like to hear the bad news -- speaking as a bankruptcy lawyer myself, I often tell people my business is delivering bad news. Unfortunately, bankruptcy is not the answer to every problem, and usually, when it comes to taxes, you are going to have to deal directly with the IRS. Good luck!
1 person marked this answer as good
Sharon Elizabeth Chirichillo, licensed in Washington and Oregon
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Reputation Level 9
Answered about 4 years ago.
Administrative Law Lawyer in Sacramento, CA.
As mentioned by my colleague, most taxes are not covered by bankruptcy. Especially when the bankruptcy is filed for an individual and the taxes are owed by a defunct corporation. Undoubtedly, the IRS Revenue Officer is looking to assess a Trust Fund Recovery Penalty (TFRP) against you personally for your corporation's failure to make payroll deposits. The Revenue Officer has to go through an extensive investigation to determine who is liable for the failure to make payroll deposits. Once identified, the Revenue Officer assesses a penalty against that individual, which is usually a large fraction of the total liability owed by the corporation. At that point, the IRS will be looking to collect against you personally. And, by that point if not sooner, you should be working with an experienced Tax Attorney who understands how to resolve IRS back taxes.
Given your lack of assets and assuming that you are personally "in the red" (income < expense) on a monthly basis, you may qualify for either an Offer in Compromise (i.e. settlement) or Currently Not Collectible status (i.e. the IRS agrees there is nothing for them to collect from you). Again, you will want to consult with a Tax Attorney to find out what works for you. Related Questions3 Attorney answers: 
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