IRS Lien question (HHM this one might be for you)

[southernbelle]

I was reading through one of HHM's stickies regarding the IRS and their collection practices. One of the main reasons why I am fearful of filing an OIC with the IRS is because of the fact that they could cause me additional grief with a tax lien on my credit report.

If the taxes owed are filed under the EIN for the business and not my SSN, could the IRS still file a tax lien that would show up on my credit report?

[rfassett]

If the taxes are trust fund taxes and they have been assessed against you personally, then yes, the IRS can and will file tax liens. If they accept the OIC, and you pay them with the acceptance of the OIC, then there would be no need for them to file a lien.

[HHM]

rfasset is correct, if you have been assessed the trust fund recovery penalty, the liens will attach to you personally.

I would add, if these are not Form 941 taxes (or if you are out side the Assessment statute of limitations, i.e. IRS has 3 years to assess the TFRP to you personally) AND the business is truly incorported, then the tax stays with the corporation and the tax liens only attach to the corp.

[southernbelle]

Thanks guys. The taxes (941/Trust Fund taxes) were assessed for the business and against me personally since it was a sole prop. There wasn't a Trust Fund recovery penalty assigned, just the normal penalties and interest for non payment, however I suspect that I will be forced to make a decision soon as to how I should handle them since I am in day 55 of 60 awaiting discharge.

[HHM]

Thanks guys. The taxes (941/Trust Fund taxes) were assessed for the business and against me personally since it was a sole prop. There wasn't a Trust Fund recovery penalty assigned, just the normal penalties and interest for non payment, however I suspect that I will be forced to make a decision soon as to how I should handle them since I am in day 55 of 60 awaiting discharge.

If your a sole-prop, then there is no separate business, legal, entity. Thus, all debt is personal debt to you, including ALL taxes. So, you are correct, there would be no assessment of the trust fund recovery penalty because you are directly liable for the full 941 taxes, w/ all penalties and interest.

[southernbelle]

I was pleasantly surprised to see the IRS and one other taxing authority list a portion of the taxes as priority and another part as general unsecured. When I questioned my atty. about the dischargeability of the unsecured portion he explained to me that those taxes would be discharged in my chapter 7 because they are considered fiduciary taxes. From the looks of the claim, it looks as if most of the penalties are considered unsecured and the interest and principal are considered priority.

I'm not complaining since every little bit helps and I originally thought all of it was priority and non-dischargeable.

[southernbelle]

Another question HHM. I've been seriously wondering how to inform the IRS that my ex was responsible for the taxes as well since he had the obligation of writing checks, filling out and issuing W-2's, paying employees and keeping the books. I read on the IRS website that they wouldn't split the debt, but I would like them to make him at least partially responsible for the taxes.

Any ideas on how to do that?

P.S. I briefly asked an IRS agent about assigning part responsibility to my ex and he didn't seem to care since it was a sole prop. If I can prove he had partial responsibility, do I have to take him to tax court or is there something to be filed directly with the IRS? Or would it be better to let that sleeping dog lie since it seems like the IRS's position is to go after the easiest target anyway.

[HHM]

Yeah, you can't really force the IRS to go after a co-debtor. About all you can do is supply the contact information, and let the chips fall where they may.

If this were a corporation, and they were assessing the Trust Fund Recovery Penalty, during your 4180 interview (i.e. kinda of like a 341 meeting, but more involved), they would ask you for the names and information for anyone that had certain types of authority. But the IRS is not obligated to act on that information, they will go after whoever they find first.

[southernbelle]

Exactly what I thought. I was just trying to figure out if it were worth my time to pursue. I think I'll take my chances with the Chapter 20 and seek the protection of the courts and be done with the entire thing once and for all. Thanks again.