Payroll Taxes & IRS after ch 7

[NanaOf11]

I've been poking around the forum and am very impressed with the quality of advice being given. Yes, we have a BK lawyer & one just for this tax issue. Would like any info here before I burning up dollars calling them.

Here's my situation, just received our Chapter 7 Bankruptcy discharge based primarily on my guarantee for certain business debts. The business (Corporation) shut down & dissolved in 2009 and doesn't have any assets to satisfy any of the debts.

Probably most importantly, part of the business debt (approximately $30k) is comprised of "trust-fund" payroll taxes that we're not paid by the company to Federal and State agencies back in 2008/2009. I haven't received an assessment from the IRS or notice from the state that they intend to look to me to satisfy the debt, but I suspect it will come soon. I realize that these are non-dischargeable debts. Will IRS consider reducing them? I want to get to a point where I can start paying them off over a period of time (preferably about 10 years).

I know IRS is going to have their own formula to see how much disposable income we have to pay them. Does anyone have any experience with them in this regard or know the formula they use?

Thanks in advance..

[HHM]

First, realize that you are only liable for the "trust fund" portion of withholding tax. Thus, you will not be personally responsible for the interest and penalties that were accrued by the company on that tax (unless it was a Sole Prop or single member LLC).

There are only 2 ways the IRS reduces a tax liability. (1) you prove there was a calculation error or amened the tax return to fix a mistake, or (2) Offer in Compromise. As you probably know, an OIC is a settlement contract between you and the IRS. The IRS DOES NOT simply reduce a principal tax liability.

As for any payment formula, it really is not that much different than the Means Test you took to qualify for Chapter 7 Bankruptcy. Best of luck.

[NanaOf11]

Our Attorney did mention an OIC on our first consult with him. He is in the same firm as our BK Attorney & spoke about our case prior to us filing, so they have a plan. They both have been great and actually made this process bearable for us. You always hear about lawyers being jerks, these guys went to a different school I guess!

**Does the IRS require actual bank statements or will we simply fill out some type of form showing our budget?

[HHM]

Generally, the IRS asks for 3 months of bank statements.

[last2cents]

Nana - I know that I've responded to threads you've posted before, asked for more info - and then dropped the ball on responding again. I apologize for that.....things are a little screwy now and I don't have as much time as I would like to hang around here.

(hanging around here is MUCH better than hanging around my real world )

I am in virtually the same situation - the only difference being is that my company (corporation) is still operating.

In my case, the IRS filed liens against the corporation for the unpaid payroll taxes. After the lien was filed, I hired a lawyer. My attorney then filed a "request for collection due process hearing" which happened today.

I had to submit the "Collection Information Statement for Business" (form 433b) and a four inch stack of copies of paperwork to show the hearing officer that the proposed installment agreement was viable.

My attorney thinks the hearing officer is going to go for the installment agreement we're proposing - but, because the company is still operating, and because I have not been personally named by the IRS for the liability, we are not even pursuing the OIC route.

I would imagine that the same route is open for you (regarding the hearing), and that you'll have an opportunity to make a proposal to the IRS.

(still keeping my fingers crossed that my hearing officer goes for the plan).

[NanaOf11]

Thanks for responding. We are working on collecting the info needed for our "OIC".

Good luck to you as well and congrats for still being viable in this economy!