IRS Payroll Tax Problem Cases
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These are actual cases that we resolved for a client who had serious payroll tax problems. We used every resource available to resolve these problems for our clients. We omitted names and locations to protect the confidentiality of our clients.
Payroll Tax Problem - Self Employed Case
The client was a self-employed doctor and operated an office. IRS payroll tax returns were not filed for a number of years. The IRS audited the client and prepared payroll tax returns for the client. There was confusion on how the IRS prepared the payroll returns. This included preparing an annual Form 944 tax return for 2007, but then later preparing quarterly Form 941 payroll returns for the same year. Essentially, the IRS was charging the client twice for payroll taxes in the same period. The client wanted to setup an affordable payment plan for outstanding payroll taxes owed.
- We completed a thorough analysis of the client’s IRS payroll tax account. We reviewed our findings with the client and developed a strategy to address the payroll tax issues.
- In the beginning, the client was unable to afford an installment agreement. We knew it would take several months to correct the payroll tax issues. We had the client make voluntary monthly tax payments to reduce the tax balance. By the time the payroll tax account was fixed, the client could afford the installment agreement.
- Working with the IRS, we fixed the payroll tax account, including the double payroll taxes charged for 2007.
- During the time we worked with the IRS, the client made a nice dent in the payroll tax balance. We contacted the IRS and set up an installment agreement that the client could afford
The client was finally at peace with the situation. The IRS payroll tax account was correct, and an affordable payment plan was set up to pay back outstanding payroll taxes.
Payroll Tax Problem - Business Case
The client owned two separate businesses and owed $200,000 in payroll taxes. The client’s business gets federal contracts and could lose federal certification in 18 months if not compliant with the IRS. The client had previously hired another firm for tax relief, which charged the client several thousand dollars over the course of almost two years. The firm kept telling the client that the case was being held up by the IRS and asked for more money to continue representation. The client lost confidence in the firm and hired ALG Tax Solutions.
- We gathered all the information from the IRS and reviewed the payroll taxes owed.
- We worked with the client to merge the two businesses and prepared current year business tax returns for both companies.
- We called IRS collections and learned that the case would not be assigned to a IRS Revenue Officer until two missing payroll tax returns were filed.
- We notified client of the missing payroll tax returns and promptly filed all missing payroll tax returns.
- We contacted the IRS multiple times to expedite the assignment process
- We worked with the client to gather all the supporting documentation needed. We then prepared the IRS forms and submitted them to the IRS Revenue Officer.
- We proposed terms for a formal Business Installment Agreement and the IRS Revenue Officer eventually agreed to terms that the client could afford.
- The IRS accepted the Business Installment Agreement terms.
This case was extremely complex and took about one year to resolve. The client was ecstatic to get the IRS payroll tax problem resolved. As a result of the accepted Business Installment Agreement, the client’s business remained operational and did not lose its federal contracts.
Please Note: It can take 6 months to a year to fully fix complicated tax problems. This can be due to several factors such as the tax relief strategy or IRS delay.