My SD (42 y/o) called yesterday asking advice because she, and the other members of the board of a local neighborhood swim club outside Cincinnati, are being sued (does the IRS sue people?) for back payroll taxes. Seems it all adds up to about $15,000 when the taxes, penalties and interest are added up.
I will relate what she told me on the phone but I have no first-hand knowledge and some of it sounds quite amazing.
Seems that payroll taxes were underpaid for the years 2005-2011. The IRS has settled a couple of the years (2007 & 2011 is the rumor) with one of the members and she has been removed from the suit. The word is her husband is a hunting buddy of the IRS agent who is handling the case and she and the agent went to school together. It also seems she settled and got out of trouble prior to the other folks even being notified what was going on.
The IRS has put a lien on the property and frozen all the bank accounts. The swim club is usually open Memorial Day to Labor Day but will be unable to open with all their bank accounts frozen. SD called the Cincinnati Taxpayer Advocate who was surprised the club was not being allowed to set up a payment plan and continue to operate to pay what they owe. IRS agent is playing hardball all the way. Is this normal? This doesn't seem like a huge amount of money given how many years we are talking about and that penalties and fee are at least half of the $15,000.
I recommended, at a minimum, to get everyone together to try and make a plan. Sounds like a tax lawyer would be a good idea but the one that is known to the family charges $250 and hour and wants a $5,000 retainer. SD and her husband can't do that on their own but maybe the group can do it together. The IRS wants her to come into the office and sign something that accepts everything they are saying but I recommended against signing anything without a lawyer.
I told her to check whether the club/board of directors has an errors and omissions policy or a liability policy that might cover their defence.
Would her own liability policy connected to her homeowners insurance help her defend herself?
I will relate what she told me on the phone but I have no first-hand knowledge and some of it sounds quite amazing.
Seems that payroll taxes were underpaid for the years 2005-2011. The IRS has settled a couple of the years (2007 & 2011 is the rumor) with one of the members and she has been removed from the suit. The word is her husband is a hunting buddy of the IRS agent who is handling the case and she and the agent went to school together. It also seems she settled and got out of trouble prior to the other folks even being notified what was going on.
The IRS has put a lien on the property and frozen all the bank accounts. The swim club is usually open Memorial Day to Labor Day but will be unable to open with all their bank accounts frozen. SD called the Cincinnati Taxpayer Advocate who was surprised the club was not being allowed to set up a payment plan and continue to operate to pay what they owe. IRS agent is playing hardball all the way. Is this normal? This doesn't seem like a huge amount of money given how many years we are talking about and that penalties and fee are at least half of the $15,000.
I recommended, at a minimum, to get everyone together to try and make a plan. Sounds like a tax lawyer would be a good idea but the one that is known to the family charges $250 and hour and wants a $5,000 retainer. SD and her husband can't do that on their own but maybe the group can do it together. The IRS wants her to come into the office and sign something that accepts everything they are saying but I recommended against signing anything without a lawyer.
I told her to check whether the club/board of directors has an errors and omissions policy or a liability policy that might cover their defence.
Would her own liability policy connected to her homeowners insurance help her defend herself?