• August 20, 2016
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If you think the IRS can collect unpaid taxes only up to a maximum of 10 years, you need to revisit the assumption. No matter the time lapsed, if the IRS finds out that someone owes them taxes, they leverage all possible means to recover the amount. In a recent case of unpaid employment taxes – “Beeler vs. the IRS” – the federal body went after three individuals as their employer failed to pay the withheld payroll taxes. What is surprising is that the IRS went after one of these employees 30 years after the company defaulted. You might be wondering why the employees had to suffer? To understand why the employees were held accountable, let’s start by explaining the concept of a “responsible person”, as viewed by the IRS.

Who is a “Responsible Person”?

Every year, employers withhold federal income and payroll taxes (also known as “trust fund taxes”) from the salaries of their employees and pay them to the IRS. Failure to make the payment may lead to penalties. According to Section 6672 of the IRS tax code, if the “responsible persons” fails to withhold taxes or default willfully, they may be liable to a penalty equivalent to the amount of the unpaid payroll taxes. A “responsible person” is someone who can, or has the authority to direct someone, to collect, account for, or pay over the trust fund taxes.

Implication in the “Beeler vs. IRS” case

In 1982, a company called Equidyne Management failed to pay employment taxes. Later, in 1985, the IRS assessed 100 percent penalty against three of its employees – Joel Beeler, Robert Liebmann and Stuart Ross. The three were held accountable for the failure, as they were the “responsible people” entrusted with the job of withholding taxes from the salaries of employees and paying it to the IRS. Now that you know who is a “responsible person”, you would know why these three were held responsible.

Later in 1995, the IRS collected $81,000 from Ross and awarded judgements against Beeler, Ross, and Liebmann for $154,000, $117,000 and $154,000 respectively. The IRS, however, made a mistake in 2001. It released the tax liens against all three, which should have ideally lasted for 10 years. After 6 years, upon realizing the mistake, the IRS went after Beeler to collect the outstanding dues and was able to prove that neither Liebmann nor Ross had fulfilled their obligations, and therefore, the court permitted the agency to collect the dues from Beeler.

The Lesson Learned

Businesses must ensure that they file their payroll taxes accurately and on time. Failure to pay taxes not only attracts financial penalties, but may also lead to criminal charges if the issue is ignored for long enough or in the presence of other aggravating factors. If you are having a tough time managing your employment taxes and need expert help, The Law Offices of Nick Nemeth will be happy to help. Feel free to contact us for all your questions and concerns related to IRS taxes. Simply call (972) 426-2553 or fill out our contact form and we’ll take it from there.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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