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O/T Any Corporate Accountants Out There???

Discussion in 'Off Topic Threads' started by mette56, Jul 28, 2011.

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  1. mette56

    mette56 Well-Known Member

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    My corporate accountants (Deloitte-Touch, formally Deloitte Haskins and Sells) disagree with the IRS regarding 941 tax payments made through Federal Bank Deposits. Please PM me or comment on any input as to whether the IRS can re-direct taxes paid and marked "FOR 941 Taxes Only", or not. Would like to settle this once and for all! A short time ago I had three accounting firms on retainer and they all disagree with the IRS...apparently there is no written rule and the IRS thinks they can do whatever they want, regardless of what accountants accept as rule. Yes, I've written my congressman in two states but have received no clear answer. IRS Tax Advocate division agreed with my accountants, then changed their opinion to something less definate.I have had two IRS officials that have flatly disagreed with IRS on this matter. What's your opinion?

    Thanks in advance,

    milt
     
  2. Russ-in-Pa

    Russ-in-Pa Well-Known Member

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    It sounds like you are in the middle of a pissing match. You aren't gonna "win".

    The only outcome will be you spending too much $$$ on accounting, and attorney fees.

    Been there and done that. I also have the scars to prove it.

    The IRS can and will drag this out as long as you want, just so they can justify their jobs.
     
  3. 870

    870 Well-Known Member

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    Since you already have 4 similar opinions, it is likely the IRS is wrong in your case. There are rules covering these situations, so I am guessing you have a bit more complicated situation than simply redirection of a federal tax deposit coupon or EFTPS payment?

    You mentioned payment marked "FOR 941 Taxes Only", was this a regular timely tax deposit payment with a coupon or are you dealing with delinquent liabilities? Generally, IRS has to follow your instructions for voluntary payments, but not for involuntary payments. Also, the notation you showed would not be specific as to time period (although presumably the coupon or EFTPS transmission would cover this), whether it applied to withholding taxes, or to employer portion of taxes, assuming you may be into a trust fund liability situation. You are dealing with a reputable accounting firm, I suggest you take their advice in moving forward.

    If the tax advocate changed their opinion, it would seem the grounds for it were spelled out. What issue did they raise?
     
  4. mette56

    mette56 Well-Known Member

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    Russ, I'm past the point of involving accountants and attorneys. Like you BTDT and I also have the scars to prove it. All 941 payments for this corp were made into "Trust Fund". I have the endorsed, cashed and returned trust fund checks to prove it. Problem - it took 2 years for the IRS to respond to my attorneys and another year for them to admit that the "missing" payments were not missing but were re-directed. Imagine having paid a bill to the IRS (or anyone), having the cancelled and endorsed checks in your possession, then the IRS refuses to acknowledge your attorneys proof of payment. They would never admit where the payments were re-directed to. I lived in MO at the time and could get little done through my congressman there. Then moved to KS and my congressman there was totally inept (sorry but he was). I now live in TX and I'm in hopes that my congressman here will get to the bottom of all this. I'm attempting to cause change in the way the IRS sometimes abuses honest taxpayers. The amount was only $8,000.00 in dispute so it's a matter of principal and DECENCY...not money. 870, I spent many months in direct contact with the Advocate service and worked direcly with a senior Advocate. She was convinced all along that I would end up proving my case as she believed, as do all accountants and tax attorneys I discussed this matter with in the last 11 years, that "For 941 Trust Fund Only" is a binding designation. There was no written report on the final verdict from the Advocate service. Only a call from her stating "I guess you received incorrect info from your accountant". Then she wrote me a personal letter of support...then she retired in disgust. If you like, I'll PM you a copy of her letter. Finally, I purchased a car from one of the largest new car dealers in Tulsa. In that process met the owner of the dealership. He told me he has paid over $1MM in fed. taxes he did not owe but fighting the IRS is impossible regardless who or how wealthy you are. If you sue the IRS and loose....you might as well cross the mafia. And 870, there may be rules but not covering this particular question. If so, me, half a dozen lawyers from KC to Atlanta and a dozen or more accountants I've consulted with over the last decade don't know about them. Your comments are very much appreciated! I need all the ammo I can get.
     
  5. 870

    870 Well-Known Member

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    Sounds like there is more to this. Noting "941 Trust Fund Only" is an unusual notation to make on a normal deposit check, since only a portion of any deposit is actually for "trust fund taxes". That usually happens after there has been a problem surface and discovered that withholding taxes were not paid. Once you get past that point, the declarations should be very specific as to which tax, withholding v employer, and period. Lacking this, things might not go the way you want them, although there are many possibilities involved depending on what exactly is going on.

    Not sure if any leins were involved etc.,many things come into play, which I'm sure your accountants are aware of. I can see the amount involved may not be enough to continue fighting further, but really, your CPA's should have been able to explain the situation and whether it was worth going forward.

    It can't be settled on TS that is for sure. The general test is the voluntary v. involuntary payments, and whether they were considered tax payments (which I assume) or just deposits. It's too bad Touche couldn't get this settled given a good fact pattern (not sure about this though since it can be complicated). Not worth going to court over it.
     
  6. mette56

    mette56 Well-Known Member

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    870, Actually the situation was very simple and there is not more to this. This particular corp had made its 941 payments thru Commerce Bank the same way, as instructed by three different accounting firms over a 7 year period...never a problem. I closed the company orderly and hired St. Louis Small Business Associates to ensure its orderly closing. At that time we still retained our corp accounting firm. Final tax payments were made in their presence and under their supervision and direction. Howard Moerling, pres of that firm is still puzzled over what happened. It was not complicated. IRS sent final bill owed when there was none. Then aside from our communications and proof would not even respond. Talk with a tax attorney that has worked for the IRS, it's common for the IRS to trash requests from taxpayers. IMO and the opinion of four fairly prominent tax attorneys I've hired, the IRS does what it wants because they can't be sued for damages or liable, only for money that they owe taxpayers as a refund. If you loose a suit to IRS you're in for, well look it up. The IRS should be held to the same rules that other creditors are held to along with taxpayers and the general public. That is where I hope to bring change. I respectfully appreciate your comments and attempt to help...870. Thanks! (I agree not worth going to court over-that's why I'm involving my congressman)
     
  7. 870

    870 Well-Known Member

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    That is frustrating. I've never had a situation that was not ultimately resolved, but I understand why you want to keep up the fight. The only reason I mentioned more to it was when you mentioned "Trust Fund" designations, which is highly unusual for someone to make when depositing a normal tax deposit, since the deposit is never all trust fund taxes. It is usually used when you are way behind and IRS is pushing you. Usually used to try to pay off the trust fund taxes (that carry personal liability) before the corporation's portion of the tax so that the owner avoids liability when the balance won't be paid in full or for an extended period of time.

    Good luck.
     
  8. Dickgshot

    Dickgshot Well-Known Member

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    I'm always suspicious when I see a post about taxes by 870 - suspicious that he has a lot more experience than he lets on, because his replies are always
    knowledgeable and accurate.

    As he stated, you normally don't designate a payment to apply to "trust fund
    portion only" unless there are delinquent taxes owed by a defunct corporation, and the IRS has- or might be able to assess the "trust fund recovery penalty" against corporate officers, employees, or other "responsible persons."( It is only the withheld tax that is the trust fund portion. )

    If a payment were made as a federal tax deposit, I'm not sure how you would be able to designate the payment. If it's by check, the check is not payable to the IRS, it's to the bank and the bank is transferring the funds. Online payments throught the electronic filing system do not, I believe, allow a way to designate a payment to the trust fund portion only.

    It sounds to me like somebody had the right idea, but only got it about half right. As 870 said, you can only designate a payment if it's a voluntary payment. It may not have been voluntary if it was in response to an IRS demand
    for payment. There are other factors that could have come into play.

    Large accounting and law firms generally have the knowledge and means to prevail in a contraversey if they have a strong case. Sometimes, to be honest, they pursue a losing case to save face (read "liability") or generate fees.
     
  9. mette56

    mette56 Well-Known Member

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    dickgtax, Holes are exactly what I'm looking for. This story has gone on since 2000. With all this water under the bridge, I'd love to find out why and how this all happened. It seems odd to me that with all the professionals I've consulted with including the Advocate service, I would know by now. I will have my case before my congressman next week and will let you guys know what I find out. I'd be happy to forward any of my paperwork to either of you for clarification. Or give you the phone numbers and names of the professionals that have been involved along the way. There is more to the story but not sure it would apply such as the Advocate service finding that the IRS had billed us for several months that we were not in bus. or employing anyone. At that point the Advocate thought all was clear. The IRS did modify the amount owed by 2/3's. The Advocate service, after reviewing my case, believed I was in the right. That's why they took it on.

    I'm puzzled too.

    Thanks again for your input.
     
  10. 870

    870 Well-Known Member

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    Dick is correct about the Trust Fund designations, I believe it was meaningless to make a notation on the check back when you made deposits w/ an 8109 since the IRS never saw the check. The coupon itself (back in the day) was the designation for type of tax "941", and tax period, but that's the end of it as far as I know. Same with the EFTPS system, no way to designate Trust Fund.

    The other issue is you didn't mention if you had the receipts for the tax deposits from the bank, they might help more than the checks, since again, the IRS doesn't ever get the checks. Sounds like you might have had more then one business, any chance the EIN's got mixed up?

    I doubt you made valid Trust Fund designations from the sound of it, although if you used the proper 8109 voucher for the corp, and completed the tax type and tax period circles properly, the IRS should have been stuck applying it to those taxes, and not penalties etc. But again, it is confusing since I can't tell if you are talking about timely deposits or payments made after IRS contacted you in response to the attempt to shut down.
     
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