William Kunofsky

William Kunofsky

Tuesday, July 19, 2011

Appeals of Estimated Tax Returns

Taxpayers that have not filed tax returns often receive correspondence from the IRS requesting the missing return. Later the taxpayer will receive a letter with an estimated amount of tax for the year that was not filed. once the deadline has passed, the taxpayer is noticed that they now owe tax, penalties, and interest. and have ninety days to file a U.S. Tax Court Petition. This is often called a 90 Day Letter. Many taxpayers stop here and later learn how bad their decision was for their future.
The Tax Court Petition allows the appeals division to review the tax returns that will be prepared. Should appeals not accept the return or require adjustments to the return that are unacceptable there still is the chance of settlement before the trial. Alternatively, the Court could accept the return.
The decision to fix the problem not filing is important. The audit the IRS completed causes consequences that are truly catastrophic. Procedural protections such as statutes of limitation are based upon assessment after the tax return are actually filed with the IRS. Bankruptcy relief requires the filing and assessment of a tax return.
Signing the audit can be considered the equivalent of filing a return.

Sunday, July 10, 2011


Every employer is required to pay the tax withheld from their employees. Often businesses do not have the money and fail to deposit the tax as required.  This can be for a myriad of reasons. However, I don't care about the reason. The IRS or state tries to collect the tax. That is this post's topic.
How do you help this desperate position.you have placed yourself into? Designate the payments you make to the IRS are to the TRUST FUND TAX.  The trust fund tax is the tax withheld from the employee. Pay that tax first. The trust fund tax payment is not deductable. However, the IRS treats you as a trustee that screwed both his employees and the IRS. Therefore, mark the payment to be applied to trust fund.
Officers and other responsible persons will discover that they may be treated as personally liable for the trust fund taxes. Therefore, PAY THE TRUST FUND TAX!
You can only designate the application of a payment if it is voluntary. The IRS will treat a non-designated payment or a payment from a levy as non-designated. They will apply the payment to the penalty, interest, non-trust fund tax, and finally trust fund. If you can designate the payment you are decreasing your personal liability potential.