L K Williams wrote:

- quote -

Prior to the meeting, the POA directs t/p to say nothing,
unless POA should ask the client a question in the meeting.
IRS enforcement people have long been instructed to respect
the POA. The reason section 7521 was enacted in 1988
(Taxpayer Bill of Rights) was some IRS people in some
offices felt the Internal Revenue Manual didn't have to be
followed if inconvenient.

In fact, sec. 7521 directs the IRS EE to explain t/p's
rights to t/p at the initial meeting, even if a POA is there
who knows what those rights are.

This is not to argue whether t/p present or not in this
case, or any case, which is always a matter of POA judgment
based on a variety of considerations.

Fred F.

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xSrv <n3_eu[at]comcast.net> wrote:
- quote -

I won't dispute this but, from a practical standpoint, it
has its problems. If the taxpayer is present and does not
respond to a question, the Revenue Officer will develop
his/her suspicions. If the POA tells the taxpayer not to
respond, the RO could think he is not cooperating. If the
question is a legitimate one any failure to respond will be
taken as a lack of cooperation, or worse, as obstruction if
the POA directs the taxpayer not to respond.

It is much easier if the taxpayer is not present, then a
nonresponse cannot be construed to be either lack of
cooperation or obstruction. Yet, it does provide the
opportunity to consider the implications of the question and
any response.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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TxSrv wrote:
- quote -

(snipped

concur completely. If a POA is in force, it don't matter
where the taxpayer is located; in the room or elsewhere,
the rep is in charge of framing all responses.

The secret of success, however, is for the rep to correctly
guage the factors that influence the interplay among all
three parties; level of knowledge of the RO, the severity of
the problem, the propensity of taxpayer to talk too much,
and so many more. In short knowing what to say, when to say
it, and who to say it.

Sometimes it IS good policy to have the taxpayer present at
an interview; most cases not of course.

ChEAr$,
Harlan Lunsford, EA n LA

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L K Williams wrote:

- quote -

I cannot agree with that, because under section 7521, the
IRS must respect the t/p's representative if he/she holds a
power of attorney, and that POA cooperates. The t/p has the
perfect right to say nothing.

In the orig poster's case, if IRS wants to know what this
officer did within the company, they can simply pull a W-2
listing and, after notice to the poster (if required), talk
to some of those people. The preferable method is what the
IRS is doing here, and they hope any discussions will be in
good faith.

Fred F.

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- quote -

Actually, the majority of Trust Fund Recovery interviews are
conducted by ~Revenue Officers~, not Special Agents.

RO's do not PACK!, though they are in the trenches working a
high volume of trust fund cases conducting routine
interviews & yes observing assets to make a prudent
determination of not only assessing the TFRP aka 100%
penalty, but a prudent determination of future
collect-ability!

Hypothetical that might not apply to the OP's situation, if
the subject of the investigation, is old, now living on
modest life support pension or Social Security, has not
major assets (Land Homes, valuable personal property, and
there is no indication of fraudulent asset conveyances,
it's possible the RO might find the Person Responsible but
collection potential is NIL, if handled correctly and
~everyone cooperates~ the penalty in such a scenario might
not be assessed.

If the representative & RP want to be tight lipped it might
very well back fire on the RP, prudent disclosure of the
facts would serve all parties best interest.

Remember, these are TRUST FUND TAXES, theft from the
employees of the company and all honest taxpayers,
collection of this portion of the tax debt is extremely
important, especially from those who were the cause of it's
accrual and have absconded with funds to their personal
benefit!

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Sam Cromwell wrote:

- quote -

I don't understand how it was necessary to be an officer to
own stock. Perhaps there were a few S/H, and everyone was
to be on the Board, and state law as to minimum number of
officers means every Board member is an officer. Were I
your representative, I would check all that out, if needed
to argue it.

IRS is probably somewhat aware of your tangential status,
and they went unsuccessfully after others, so down the list
they go. What they're doing is "100% penalty," which is a
means of collecting payroll taxes from anyone responsible to
turn over payroll tax money to IRS. That's a lowly
bookkeeper, up through officer responsible for the work of
the people. A start is you had no signatory authority over
bank accounts, nor a position of supervision.

For $323,000, they will likely explore the facts very
closely, and a tax pro who knows this area is advised. I
might want you present in case of factual clarifications,
and not in your home, but my office. And else you just
listen, or risk being rudely interrupted. The collection
information statement info is irrelevant at this point;
forget about it.

Fred F.

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"Sam Cromwell" <scromwell2[at]yahoo.com> wrote:

- quote -

This is not a "Do It Yourself" project!!!!!

The IRS has the power to collect the so-called payroll
"trust fund" taxes which are not paid by the employer from
anyone considered to be a "responsible individual."
Responsible individuals are anyone and everyone who causes
the company to spend money on anything before paying the taxes
withheld from employees. Responsible persons do not have to
be employees but can be anyone who has any say over writing
checks. In the past, IRS has been able to sustain claims that
outside accountants, payroll services, and even banks were
responsible persons and collect money from them.

As the IRS sees things, the employer withholds money from
employees' paychecks, that is the employees' money. If the
funds are not paid to the government, it is akin to stealing!
As a result, Revenue Agents assigned to such cases do not show
any sympathy toward anyone they go after. Sad stories and
hardships won't help.

From your post, it would appear that you are not a responsible
person or that your responsibility may be limited to the period
you were active with the company. Form 4180 is designed to
determine if you are, in fact, responsible. Form 433-A is
designed to collect information on your financial affairs so
IRS can determine how much money you can pay.

You should not meet with the Revenue Agent by yourself! As the
Moderator said, find a tax professional who is experienced in
these matters, who knows how to deal with the IRS. Let that
person talk for you. (When I used to take clients in these
situations, I obtained a power of attorney and appeared before
the IRS. I did not want my client there, physically at our
meeting! If asked a question by the Revenue Agent, I could
limit my response to the minimum facts or say I would have to
consult my client. If a taxpayer is present, he must give an
answer on the spot, without opportunity to consider all the
implications. Further, in almost all cases I've seen, the
taxpayer is so concerned that the Revenue Agent understand
their position that they feel compelled to explain in great
detail! This is dangerous! My cardinal rule is to never
tell IRS anything they don't ask for -- the old army saying
of "Don't Volunteer!"

To repeat -- You Need Help! Find a qualified representative
immediately!

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

Moderator:
Mr. Cromwell, You really need to heed the advice you have
been given. You are not going to meet with run of the mill
IRS agents. These are the debt collectors. Someone correct
me if I am wrong, but I suspect they are Special Agents which
means they carry handcuffs and have a bulge in their jacket
because they come packed. They like meeting in people's homes
so they can assess the value of the assets that may be siezed
and sold to satisfy the trust fund debts.

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Here's the situation. I am listed as an officer for a
California S-corp. As of now, I own approximately 13% of
the company, but quit working there in August 2004. I
worked a regular job there and didn't do anything in the way
of signing checks or "steering" the company.

Today I received a notice from the IRS that I am (or could
be) liable for back payroll taxes amounting to $323,830.
Included were a blank Form 4180 ("Report of Interview with
Individual Relative to Trust Fund Recovery Penalty or
Personal Liability for Exise Taxes") and a blank Form 433-A
("Collection Information Statement for Wage Earners and
Self-Employed Individuals"). About $80,000 in those taxes
were due before my last day of employment, and I have
verifiable evidence of my last day of employment.

They have set a meeting date which will occur in two weeks
at my house.

Even though I am listed as an officer of the corporation,
this was done so that I could receive shares of the company
and work at a reduced salary. Honestly, I had nothing to do
with the payment or non-payment of taxes or any financial
matter in the company. I do know the names of the people
who did handle the financial matters, they are listed as the
CEO and COO on the corporate paperwork, and presumably also
subject to the IRS microscope as I am. I have heard through
the grapevine that the CEO is in a lot of financial trouble
and may be serving prison time for securities fraud. There
are no links between myself and these business deals that I
know of.

Now my questions are: How concerned do I need to be about
this, and should I seek legal representation at this
meeting? Anything I should expect as a matter of course
during this meeting? I make $50k per year, so having to pay
the amount owed the IRS would do me in for life. Also, the
blank forms ask for spouse's complete financial disposition,
and yes I am married. The type of information asked goes
beyond simple income from salary, rental income, etc., and
goes as far as asking credit card balances and available
credit. So to say I find this scary would be an
understatement.

Moderator:
WARNING: Do not meet with these IRS agents alone!
Get yourself a CPA, an EA, or a Tax Attorney with
experience in representing taxpayers before the IRS.

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