I will summarize this case as best I can. S corp, single shareholder, behind in payroll taxes since 2015. Came to me as a payroll client, and after i reviewed their paperwork, I found out about the payroll issue. I got them compliant for 2 quarters and setup a PPIA. They fell out of compliance again and the PPIA payments are not being met. At this point they need to shut down the corp. The daughter of the owner has started a corporation and will be attempting to purchase the assets legally by way of Form 14135 process. A new revenue officer has just been assigned to the case since they haven’t seen any deposits and the 2nd quarter payroll return shows balance due. One of my main concerns is that I run the payroll weekly. However, it’s the owner’s responsibility to transfer the total payroll and taxes to the payroll bank account, so that the payments could be scheduled. He is only transferring the net payroll. I have several emails where I have reiterated the delinquency and what his responsibility is. This is outlined in my engagement letter as well. I am planning to call the revenue officer today. What should I say?? All I can do is let them know about the plan of action. Thanks for your feedback
I agree – inform the RO that the company is not viable and will be shutting down. The daughter would like to purchase the assets and you expect to file the 14135. The RO will probably be thrilled, but may insist on a deadline to file the final returns and to show the company is out of business. Also, file a final 433-B with the bank statements showing the closing of the account. Warn the client not to transfer or distribute any assets to themselves (like the final cash in the bank), as it belongs to the IRS.