What Is a Trust Fund Recovery Penalty and How the IRS Enforces It A Trust Fund Recovery Penalty (TFRP) is one of the most serious payroll tax enforcement actions the IRS can impose. When employment taxes are not properly remitted, the IRS may assess personal liability against individuals deemed responsible for collecting and paying those taxes. Unl...
What Is the Section 121 Principal Residence Gain Exclusion? When a taxpayer sells a principal residence, the Internal Revenue Code allows eligible homeowners to exclude a portion of the gain from taxable income under Section 121. Individuals may exclude up to $250,000 of gain, while married couples filing jointly may exclude up to $500,000 if they ...
IRS Offshore Compliance Options for Foreign Asset Reporting Many tax practitioners and taxpayers have noticed increased enforcement in the international tax space. It’s always better to correct failures in filing foreign information returns or FBARs before receiving a letter from the IRS. In certain situations, taxpayers who are living in the Unite...
Introduction Many business owners find the appeals process for Texas Comptroller sales tax audits daunting. The best way to resolve contested issues in an audit is directly with the auditor. However, when you are unable come to an agreement with the auditor, there are various channels available to taxpayers to pursue a more favorable result. The pu...
Case 1 A business hired us to assist with a sales tax audit with the Texas Comptroller. We were able to lower the liability by around $87k by providing additional arguments and supporting documents to the auditor. Additionally, we were able to secure a penalty waiver in the amount of 20k.
What is the TFRP? The Trust Fund Recovery Penalty (TFRP) allows the IRS to hold certain individuals personally liable for the unpaid employment taxes of a business. Under Section 6672 of the Internal Revenue Code, any person who is required to collect and pay over any tax and fails to do so may be liable for a penalty equal to the amount of tax tha...
Case 2 The client hired us to assist with a sales tax audit. We were able to secure a fraud penalty reduction in the amount of 134k after submitting a legal argument in favor of removal of the penalty with a Request for a Redetermination.
Successful Offer in Compromise Appeal Results in Over 90% Reduction in Liability Our client came to The Wilson Firm after the IRS denied his Offer in Compromise. He had already invested time and effort into the process, but the initial result left him facing a substantial tax liability. Our team stepped in to guide him through the Offer in Compromi...
Appeal Success: Trust Fund Recovery Penalty Avoided, Saving Client $171,000 Our client came to The Wilson Firm facing a proposed Trust Fund Recovery Penalty for unpaid employment taxes — a serious matter that would have personally assessed him more than $171,000. Our team prepared and submitted a comprehensive written appeal and engaged in detailed...
An assessment is the IRS’s formal recording of a tax liability on a taxpayer’s account. Once a liability has been assessed, the IRS is authorized to begin collection efforts, such as sending bills, filing liens, and issuing levies. Tax and penalty assessments can arise in a number of ways. Perhaps a taxpayer never filed a return, so the IRS filed a...
Sales Tax Audit Appeal Results in $70,000 Penalty Reduction Our client engaged The Wilson Firm to represent them during an ongoing sales tax audit with the Texas Comptroller. Facing significant penalty assessments, we filed a Request for Redetermination Hearing to challenge the proposed penalties. Through strategic negotiation and detailed advocacy...
Withholding Issue Resolved — Tax Assessment Reduced from $86,000 to $650 Our client came to The Wilson Firm after receiving an $86,000 tax assessment due to issues with the reporting of his Form W-2 tax withholding. After a thorough review, we worked directly with the Taxpayer Advocate Service to ensure the IRS properly credited our client for his ...
What is reasonable cause? The IRS imposes penalties for various infractions, including late filing, late payment, and accuracy-related penalties. Generally, taxpayers must demonstrate that their error or omission was due to reasonable cause for the IRS to grant a penalty abatement. Part 20 of the Internal Revenue Manual (IRM) provides a definition ...
Overview of the Voluntary Disclosure Program The IRS Voluntary Disclosure Program (“VDP”) provides taxpayers who have willfully failed to report income, assets, or other tax-related information an avenue to resolve their noncompliance with the IRS. In order to be eligible, taxpayers must have willfully violated the tax law and must make a disclosur...
