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C
cpa72
Level 4
October 24, 2023

IRS Levy

  • October 24, 2023
  • 2 replies
  • 12 views

Client owes the IRS for the trust fund portion of company (out of business) tax debt including civil penalties.  The IRS has issued a levy notice to a single member llc (owned by the taxpayer) to collect monies from it to pay the individual's liability.

Can the IRS do this?  Levy against newco owned 100% by taxpayer to recover trust fund portion of taxes due from taxpayer?

 

    2 replies

    IRonMaN
    IRonMaN
    Level 15
    October 24, 2023

    They did it, so it kinda sounds like they can.

    A solely owned LLC is still the taxpayer - kind of a left pocket right pocket thing - it's still his pockets.

    Slava Ukraini!
      BobKamman
      BobKamman
      Level 15
      October 25, 2023

      Is the LLC paying wages to the taxpayer?  If so, then it's a wage garnishment.  Otherwise, some of this depends on state law.  IRS may not be able to force the LLC to make a distribution, but it may be able to seize the entire LLC and anything it owns, including its bank account. 

      An ounce of prevention (negotiate with IRS; request a Collection Due Process hearing) would have been better than the pounding headache now created.   

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