Discussion:EFTPS and responsible party liability
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Discussion Forum Index --> Advanced Tax Questions --> EFTPS and responsible party liability
Discussion Forum Index --> Tax Questions --> EFTPS and responsible party liability
| 10 August 2009 | |
| I work with a bookkeeper who recently accompanied a mutual client to a meeting with the IRS. The bookkeeper prepared all the 2007 and 2008 payroll tax returns, which the TP signed and submitted. However, without any payment. Of course, now the IRS is pursuing this $100,000 plus and during this meeting (a request for additional information and filing of all corporate and individual returns through 2008) suggested that the bookkeeper, if she was the one making the EFTPS (some were made) payments, could be considered a responsible party. I've not heard this and wonder if anyone else has and whether this is correct or not. Thank you. | |
| 10 August 2009 | |
| yes, I have heard of it.
The IRS looks first at whomever has signature authority on the checkbook. That's not conclusive for a representative like us, but for the IRS, it is prima facae evidence. you need to do some study on the Trust Fund Recovery Penalty. There are many threads here on TA. | |
| 10 August 2009 | |
| I have actually read quite a bit, here and elsewhere, but just have not run into this particular situation. I imagine what you are referring to is, "A responsible person also may include one who signs checks for the business or otherwise has authorty to cause the spending of business funds." She wasn't making the EFTPS and knew that this TP was likely not paying what was due. I just wondered if anyone had experienced this (or knew of others) and been held liable. I do try to read before asking (most times...). Thanks. | |
| 10 August 2009 | |
| yes, I have represented bookeepers who were assessed a TFRP
the defense is usually 'she could only pay what the owner authorized her to pay' | |
| 10 August 2009 | |
| of course, you have a conflict of interest in representing both the bookeeper and the business owner. You have to follow Circular 230 carefully when doing so. | |
| 10 August 2009 | |
| IRS will look at all potentially responsible persons and that includes the bookkeeper. The question is going to be what were the bookeepers instructions. If the bookkeeper said "Boss, we need $100,000 to pay the employment taxes" and was told "Pay the rent and suppliers, IRS can wait" the bookkeeper is making a ministerial act after a deliberate act by the boss. If the boss said "Pay what you think needs to be paid first" it starts to get kind of murky. | |
| 10 August 2009 | |
| Boy, sometimes I am as clear as mud and am going to try this once again though this may make no difference whatsoever. Okay, the bookkeeper I referred to is not an employee of this TP, she has her own business and does bookkeeping and payroll for a number of different clients, just as I do. She was merely there at the Q&A with the TP and IRS simply to listen to the information needed so that the TP did not have to relay to her second-hand. She became quite concerned when the IRS agent asked whether she was responsible for making the EFTPS payments and I wasn't sure what to tell her her culpability might be. I'm not representing anyone and only asked because I haven't had to deal with this, thankfully. | |
| 10 August 2009 | |
| she may need representation from someone who has experienced this. Probably not from a great bunch of gals and guys sitting behind desks answering anonymous questions on a website. | |
| 11 August 2009 | |
| If the bookkeeper is signing checks for the convenience of the business owner and does not decide what checks to actually write; an assessment against the bookkeeper will not hold up. However, if the bookkeeper MAKES THE DECISION which bills to pay, we have a very different story.
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