Taxes taxes taxes

[olesrus]

Ok..so

I filed personal Chapt 7. Now my S-Corp appears to be in dire territory...damn economy. Anyway. I owe 941 taxes ( ALOT) and have been through the whole IRS thing before. If I close the busniess does that tax debt die with it. I am well aware of the Trust Fund Penalty ( which I have been served) but is that all I will be liable for? Because I have absolutely nothing to my name. I am thinking I can resolve this with an OIC or not collectable. Thoughts?

[HHM]

That is about all you can hope for. If you are a repeat offender in this regard (prior biz with 941 and prior TFRP), the IRS may be less accommodating, keep in mind, even though it is rare, there are criminal penalties for failure to pay trust taxes. The IRS is accepting fewer and fewer OIC's in general, and are never keen on settling the TFRP anyway. So your best bet is probably non-collectible (or hide and seek)

But yes, assuming the S-Corp dissolves and there are no assets, you are only liable for the TFRP, not the additional interest and penalties that have accrued under the business EIN. Now, if you improperly wrap up the entity or the IRS claims the entity is a sham, you have bigger problems. But assuming everything is legitimate and the S-Corp is properly resolved, then you will only be personally liable for the TFRP.

[olesrus]

Thanks HHM. I am not a repeat offender just have had this over my head for like 6 years and it caused me to go out of business . Today is my last day open. I have a nasty issue I will talk to my attorney about in the next couple days.....but I was wondering if you have some insight....

I had two locations. I closed the one...but then I had an offer to buy it from my franchise owner. He agreed to pay me 1000 a month and buy it from me for around 20,000. Well he started sporatically paying me and now he stopped. He is still running the operation and has my equipment. I have a loan on that eqip and the tax lein. We don't have anything in writing just a gentlemans agreement. Since I am closing after today....would it be best to file chapt 7 and let the trustee pay everyone and liquidate the assets? Or should I see if he can pay me off ( which I doubt ) and off course leave that for the trustee to pay out? I owe to much to even think I would recieve any of that money and I don't really care anymore. I just want to move on and start over.

Thoughts?

[BigJohn]

If notthing is in writing, you still own the business and equipment.

If you get something in agreement, the tax issue might shift to him.

Were you served personally or as an officer of the business for the Trust Fund?