Did your business get behind on payroll taxes? Maybe it was due to the pandemic, maybe it was an error someone made – regardless of the reason, all the IRS sees is a balance due and will assign a Revenue Officer, whose only goal is to collect the balance owed in full. Our team sees past that and understands it’s likely not a situation you ever meant to end up in. Even though the IRS may not care about those circumstances, our team does and we use that as motivation to find the best resolution possible for our clients. When a payroll tax balance is owed, typically the IRS will assign a Revenue Officer to resolve the case. One of their first steps is to determine who they feel was responsible for remitting the trust fund taxes to the IRS. What is trust fund tax? This is the income tax, employee share of social security tax and Medicare tax that the employer withholds from the employee’s pay. These funds are to be held in trust until the federal tax deposits are made by the employer to the IRS. Once the Revenue Officer deems a person (or multiple people) responsible for this duty, they can assess what is called the Trust Fund Recovery Penalty. This penalty is assessed to the individual personally which creates a bridge for the IRS to now not only collect based on what equity in assets and income the business has, but also the equity in assets and income the individual has as well. When you’re faced with these issues, it’s important to have a seasoned tax professional on your side that understands how to navigate this while keeping all of your assets protected and ensuring the best outcome possible.

Has your refund been seized for your spouse’s tax balance? Maybe they made an error on your jointly filed tax return. The good news is, the IRS provides a few different pathways to prevent you from being held responsible for your spouse’s tax burden. In order to qualify for Innocent Spouse Relief you must meet all of the following criteria:

1. You filed a joint return.
2. There is an understated tax on the return that is due to items that were inaccurately reported by your spouse (or former spouse).
3. You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed).
4. Considering all the facts and circumstances, it would be unfair to hold you liable for the understated tax.

Even when you believe you clearly qualify, the IRS will attempt to prove you don’t. It takes an experienced tax professional to guide you through this process and ensure the IRS sees the reality – that you shouldn’t be held responsible for this debt. If you don’t qualify for Innocent Spouse Relief, there are still other options such as Separation of Liability relief or Equitable Relief which fall under the same umbrella as Innocent Spouse. If you think you may qualify, call our team – we can help get you through this process.

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IRS Tax Resolution Roadmap