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IRS Levy
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cpa72
Level 3
10-24-2023
02:54 PM
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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 Comments 2
IRonMaN
Level 15
10-24-2023
03:14 PM
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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
Level 15
10-25-2023
04:57 PM
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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.
