WHAT you need to do when you received a call or notice from the IRS? Below are some tips that you should be aware of:
• Revenue Officer (RO) observes fair tax collection practices and taxpayer rights.
• You have Right to Representation under Internal Revenue Manual (IRM) 184.108.40.206.2.
• You will be advised first if there are possible third party contacts.
• Letter 3164 will be either mailed or hand delivered if the RO cannot verify if you have received Publication 1 Your Right as a Taxpayer, and Notice 1219 A or B: Notice of Potential Third Party Contact.
• Letter 3164 in #4, may not need to be provided to you if other advance notice has already been provided, for Third Party Contact Letter.
• Single Member LLC. Different procedures will apply if: 1) LLC is a single member LLC, a disregarded entity and not treated as an entity separate from its single member owner IRM 220.127.116.11.3; and 2) LLC is identified as the liable taxpayer IRM 18.104.22.168.2.
• If paid after January 1, 2009, employment tax liabilities incurred on wages must be reported and paid using the name and EIN of the LLC and not the single member owner IRM 22.214.171.124.2(4). The liable taxpayer is the LLC for administrative collection actions and trust fund recovery penalty investigation IRM 126.96.36.199.
• Only the name of the taxpayer liable to collection action will be included. It should not include both the name of the LLC and of the single member unless exception applies.
• If the installment agreement is combined, both the name of the LLC and the name of the single member could be included on a single Form 433-D Installment Agreement.
• At initial contact of the RO, LLC documents will be gathered to establish the right liable taxpayer. This may include: articles of organization, operating agreement, minutes of meetings, and affidavit from the members signed under penalties of perjury, etc.
• Prior to issuance of Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing or Letter 1058, RO should have identified the liable taxpayer.
• The collection due process (CDP) will be issued under the name of the LLC when the LLC is the taxpayer otherwise to single member. The LLC has the right to a CDP hearing.
• It is important that RO issued Notice of Intent to Levy and Notice of a Right to a CDP Hearing to the liable taxpayer and at the correct address.
• A notice of intent to levy and notice of a right to a CDP hearing must be issued to the taxpayer prior to levy with correct name, address, and EIN or SSN of the liable taxpayer.
• Invalid CDP Notices and Rescinding the CDP Notice. If the prior CDP notice was not properly issued to the liable taxpayer, the original notice will be reversed and a new CDP notice with correct name, address, and EIN or SSN of the liable taxpayer EIN IRM 188.8.131.52.16.
• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320. Letter 3172 is issued to the taxpayer, to advise the taxpayer of their right to a CDP hearing, at the correct name, address, and EIN or SSN of the liable taxpayer to ensure proper issuance of the notice and protection of the taxpayer’s rights of appeal concerning the filing of the lien.
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Disclaimer: Any accounting, business or tax advice contained in this communication is neither intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.
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Al-os & Associates Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies.