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What happens when a levy is placed against an employer by the IRS for back payroll taxes?

What happens when a levy is placed against an employer by the IRS for back payroll taxes?

Q: Can you negotiate unpaid payroll taxes?

Yes, you can negotiate unpaid payroll taxes with the IRS. Options include setting up a payment plan or submitting an Offer in Compromise. It's essential to communicate with the IRS and provide necessary documentation to support your case. Seeking advice from a tax attorney can be beneficial.

Q: Can payroll taxes be written off?

Payroll taxes typically cannot be written off as a business expense. They are mandatory obligations for employers. However, if you have overpaid or if there are errors, you may be able to dispute the amount owed. Consulting a tax professional can provide clarity on your specific circumstances.

Q: Can payroll taxes be forgiven by the IRS?

Payroll taxes are generally not forgiven by the IRS due to their nature as trust fund taxes. However, you may qualify for programs like an Offer in Compromise, which allows for settling tax debts for less than the full amount. It's advisable to seek professional help to explore your options.

Q: Can you do an offer in compromise on payroll taxes?

Yes, you can submit an Offer in Compromise for payroll taxes if you meet certain criteria. This option allows you to settle your tax debt for less than what you owe. To qualify, you must demonstrate that paying the full amount would cause financial hardship. Consulting a tax attorney can help you navigate this process.

Full question:

I am a C corp and was just served a lien regarding unpaid payroll taxes to the total of 41 thousand dollars. My question is do I need an attorney to help resolve this problem or can I safely negotiate with the IRS without on?. We were contacted by an attorney the day I received the lien in the mail.

Category: Courts
Subcategory: Attorneys
Date: 04/07/2025
State: Alaska

Answer:

A federal tax levy is not something to be ignored and if incorrect, steps should be taken to have it removed. You may ask an IRS manager to review your case, and you may request a Collection Due Process hearing with the Office of Appeals by filing a request for a hearing with the office listed on your notice. You must file your request by the date shown on your notice.
Some of the issues you may discuss include:

-You paid all you owed before the IRS filed the lien,

-The IRS assessed the tax and filed the lien when you were in bankruptcy, and subject to the automatic stay during bankruptcy,

-The IRS made a procedural error in an assessment,

-The time to collect the tax (called the statute of limitations) expired before the IRS filed the lien,

-You did not have an opportunity to dispute the assessed liability,

-You wish to discuss the collection options, or

-You wish to make spousal defenses.

At the conclusion of your Collection Due Process hearing, the IRS Office of Appeals will issue a determination. That determination may support the continued existence of the filed federal tax lien or it may determine that the lien should be released or withdrawn. If you disagree with Appeal's determination, there is a 30-day period starting with the date of determination, in which you may request judicial review in a court of proper jurisdiction.

We suggest contacting a local tax attorney who can review all the facts and documents involved.

For further information, please see:

http://www.irs.gov/pub/irs-pdf/p1660.pdf

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How do I get around a tax lien?

To address a tax lien, you can request a Collection Due Process hearing with the IRS Office of Appeals. During this hearing, you can present your case and discuss issues such as procedural errors or payment disputes. If successful, the lien may be released or withdrawn. It's advisable to consult a tax attorney for guidance on your specific situation.

Can payroll taxes be forgiven?

Generally, payroll taxes cannot be forgiven, as they are considered trust fund taxes that employers must collect and remit. However, you may explore options like an Offer in Compromise, which allows you to settle your tax debt for less than the full amount owed. Consulting with a tax professional can help you understand your options.