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Mr. Berry ends his article, with the results being, "Result: After examining all the facts, the Tax Court concluded that the taxpayer was a responsible party under the law and that the failure to remit payroll taxes on time was willful. Despite procedural issues raised by the taxpayer, the Court said that the IRS collections settlement officer acted within their purview. So it upheld the penalty assessed against this part-time worker.
The main takeaway from this case is that the trust fund penalty isn’t restricted to just corporate bigwigs. It can trickle down to employees in lower-level jobs and even part-timers or seasonal workers if they assume responsibility for payroll matters. In short, being forewarned is being forearmed!", but the actual court case had nothing to do with the TFRP being assessed correctly or incorrectly! It is based on the facts that the Bookkeeper did not exhaust his appeal rights when the 1153 letter was sent to him, which gave him statutory rights to appeal the proposed civil penalty, and instead, waited to bring the validity to the IRC 6672, in a CDP Appeal for a Collection Alternative. At that time it is not the validity of the assessment that can be brought up, but the way in which they will pay it. Once the SO closed the case and issued the Outcome of the hearing, as sustained levy action, he filed a Tax Court Petition, thinking he would be able to argue the assessment in TC. However, a TC Petition on a CDP Determination is only for abuse of discretion of the SO, or because they did not follow policy and procedure. In this case the TC held that the SO did follow all policies and procedures and did not abuse discretion. The main takeaway from this and result, is "If you do not believe you should be held willful and responsible under IRC 6672, then make sure that once you receive your 1153, Proposal of TFRP Letter, than you need to file an appeal within the 60 day timeframe as you cannot argue later in a CDP or TC Petition".
Response from the Author: I don't think that would suffice. Section 274(d)(4) and regulations impose stringent substantiation requirements with certain specific elements.
Glad to hear it, however since we are a website solely aimed at professional accountants and their "business" is in fact their accounting practice, the author had no other business in mind but we do wish you luck in your new business
Thank you for your thoughts, Vinny. This is an open forum and all ideas are of course welcome, provided everything remains civil. The point of the blog was just to say how as a profession, we could do better. Recent events only put more of a spotlight on ourselves as people, and yes the profession too. If you think the issue itself has to do with one incident, this is the larger problem in our country that needs addressed and why there is activism. But, for our profession, the facts are it could be more diverse and mentoring is one way the author suggests doing so.
Thank you for your feedback. We will let the author answer that more fully, but the intent here with that line was deliberately open-ended. As much as we want our content to advise, we also want it to inspire discussion and debate amongst professionals
Hey Jeff. This is what EVERY accountant wants, and has for years. We are trying to build a bit of a database of such reviews, but they are hard to come by. They vary so much that in the end they provide less direction than hoped. We have articles that advise just going with something that makes the most sense and works with what core systems you already have. Nothing is so head and shoulders above anything, just personal taste and again cost and integration are key factors. It just needs to do what you need it to do, or mostly
The SEC investigation was a seperate, and obviously larger issue, during which it unveiled this tax issue to which our writer wanted to make a point of in his ongoing coverage of relevant Tax Court cases
My answers
This comment in from Peggy Burns, EA:
Mr. Berry ends his article, with the results being, "Result: After examining all the facts, the Tax Court concluded that the taxpayer was a responsible party under the law and that the failure to remit payroll taxes on time was willful. Despite procedural issues raised by the taxpayer, the Court said that the IRS collections settlement officer acted within their purview. So it upheld the penalty assessed against this part-time worker.
The main takeaway from this case is that the trust fund penalty isn’t restricted to just corporate bigwigs. It can trickle down to employees in lower-level jobs and even part-timers or seasonal workers if they assume responsibility for payroll matters. In short, being forewarned is being forearmed!", but the actual court case had nothing to do with the TFRP being assessed correctly or incorrectly! It is based on the facts that the Bookkeeper did not exhaust his appeal rights when the 1153 letter was sent to him, which gave him statutory rights to appeal the proposed civil penalty, and instead, waited to bring the validity to the IRC 6672, in a CDP Appeal for a Collection Alternative. At that time it is not the validity of the assessment that can be brought up, but the way in which they will pay it. Once the SO closed the case and issued the Outcome of the hearing, as sustained levy action, he filed a Tax Court Petition, thinking he would be able to argue the assessment in TC. However, a TC Petition on a CDP Determination is only for abuse of discretion of the SO, or because they did not follow policy and procedure. In this case the TC held that the SO did follow all policies and procedures and did not abuse discretion. The main takeaway from this and result, is "If you do not believe you should be held willful and responsible under IRC 6672, then make sure that once you receive your 1153, Proposal of TFRP Letter, than you need to file an appeal within the 60 day timeframe as you cannot argue later in a CDP or TC Petition".
Response from the Author: I don't think that would suffice. Section 274(d)(4) and regulations impose stringent substantiation requirements with certain specific elements.
Fair point. Thanks for chiming in, feedback is Always appreciated here
Fair point, but this article was not aimed at the UK audience, US and Canada to a degree. cheers.
Glad to hear it, however since we are a website solely aimed at professional accountants and their "business" is in fact their accounting practice, the author had no other business in mind but we do wish you luck in your new business
different type of "estate" planning there, but we do have articles about clients in real estate
Thank you for your thoughts, Vinny. This is an open forum and all ideas are of course welcome, provided everything remains civil. The point of the blog was just to say how as a profession, we could do better. Recent events only put more of a spotlight on ourselves as people, and yes the profession too. If you think the issue itself has to do with one incident, this is the larger problem in our country that needs addressed and why there is activism. But, for our profession, the facts are it could be more diverse and mentoring is one way the author suggests doing so.
Thank you for your feedback. We will let the author answer that more fully, but the intent here with that line was deliberately open-ended. As much as we want our content to advise, we also want it to inspire discussion and debate amongst professionals
Hey Jeff. This is what EVERY accountant wants, and has for years. We are trying to build a bit of a database of such reviews, but they are hard to come by. They vary so much that in the end they provide less direction than hoped. We have articles that advise just going with something that makes the most sense and works with what core systems you already have. Nothing is so head and shoulders above anything, just personal taste and again cost and integration are key factors. It just needs to do what you need it to do, or mostly
The SEC investigation was a seperate, and obviously larger issue, during which it unveiled this tax issue to which our writer wanted to make a point of in his ongoing coverage of relevant Tax Court cases