433-B or 433-A or both?

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    Michael O’Leary

    Here’s my case fact pattern:

    Self-employed landscaper filed but didn’t remit payroll taxes for all four quarters of 2019. Balance due approaching $150K. Received CP504 letter in late February then found me. CAF closed before processing POA but I have been calling PPS the last couple of days to have transcripts put in E-Services mailbox. No Trust Fund Recovery penalty yet. No Ltr 11, CP90 or levies yet but I think they are coming on July 16th.Taxpayer DOES NOT owe any 1040 tax.

    I want to have resolution package mailed on 7-15.

    For whichever resolution option I decide is best, must I also include a 433-A with the 656 to determine the taxpayer’s ability to pay or just the 433-B to determine the business’ ability to pay?

    Eric Green

    Michael, my usual approach is to do the 433-B for the business and the 433-A for the individual. If its an S Corp, then we can set the wages so they cover the 433-A expenses and just submit the 433-B with a proposal (my hope being that ACS sets them for an agreement and does not do the TFRP). If its a SMLLC you can try that with a proposal the client can live with but the reality is the IRS should send the payroll case to the field to a Revenue Officer, who will definitely want the 433-A. But you never know, you might get lucky.

    Michael O’Leary

    Thank you Eric. No sooner had I hit the “Submit” button than I realized that you had done a podcast (#17) on exactly this topic so I went back and listened to #’s 17 and 37 last night.
    Functionally, this guy is an SMLLC. He has a multi-member LLC but the other member is his girlfriend who gets a K-1 for 1%, he’s 99%. I expect the IRS will consider him an SMLLC. I am going to follow all the steps you’ve taught. The first conversation is to determine the viability of the business, make him aware of the severity of the situation including a potential criminal referral, conduct my version of the 4180 interview and then start documenting business and personal living expenses. Thanks again.

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