Tax Help Question – LLC Taxed as S-Corp and Trust Fund Penalties

Question:  In IRS Publication 3402, Taxation of Limited Liability Company, it states that an LLC can elect to be classified as a S corporation.  Does an individual member of an LLC that has elected S corp status have the same protections from personal liability for payroll taxes as an individual member of an LLC that has elected C corp status?  Stated differently, does the IRS have to conduct a trust fund investigation to impose personal liability on individual members of an LLC that has elected S corp status?  Continue reading…

Quote of the Month – March 2013

I, not events, have the power to make me happy or unhappy today.  I can choose which it shall be.  Yesterday is dead, tomorrow hasn’t arrive yet.  I have just one day, today, and I’m going to be happy in it.  Groucho Marx

Accounting Firm Hit with Trust Fund Penalties for Payroll Taxes Owed by thier Client

We mentioned in a previous blog that individuals such as corporate officers and employees can be held responsible for back taxes if the company fails to pay payroll taxes.  However, other parties not within the company can be held responsible for back taxes such as lenders and accounting firms.  In this case, the accounting firm hired to manage the client’s payroll was held responsible for $325K of Trust Fund Penalties.  This is an interesting case because it shows that the IRS can go after third parties for trust fund penalties. Continue reading…

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