Tax News

CCH (cch.taxgroup.com) reports:

  Whether an employer met the worker classification safe harbor requirements under section 503 was a genuine issue of material fact and, therefore, the IRS was denied summary judgment on this issue. The IRS failed to establish that the employer did not consistently treat the salesmen as independent contractors. Although one IRS agent testified that no Forms 1099 or Form 1096 were filed by the employer for one of the tax years at issue, the employer provided copies of forms that he claimed were filed and the salesmen testified that they received them. In addition, the evidence was unclear regarding the employer's reliance on technical advice received from his attorney and the nature of that advice with respect to classification of the salesmen.

  However, the government established that federal income taxes assessed against the employer's operator and his wife and federal employment taxes assessed against the employer's operator were proper and timely. The individual gave his written consent to extend the statute of limitations and the assessments were made within the extended time. Moreover, the government was not required to send a deficiency notice to the individual prior to assessing the employment taxes and the individual consented to the assessment and collection of the income tax deficiency. Finally, the certificate of assessments and payments contained all of the necessary information and established that the taxes were properly assessed.

  The individual's argument that the assessments were incorrect because they did not reflect the innocent spouse relief granted to his wife was rejected. The innocent spouse relief granted to the individual's wife merely relieved her of her liability for the taxes at issue; it did not provide her with any type of credit or other benefit that would result in an adjustment or reduction of the tax liability owed by the non-innocent spouse.

  Federal tax liens arose on all of an individual's property at the time the tax assessments were made. The IRS produced copies of notice of federal tax lien sent to the individual by certified mail. It also treated a letter received from the individual for release of the liens as a request for a Collection Due Process hearing and ultimately denied the individual's request.

  Finally, the individual's wrongful collection action failed because he did not provide any evidence that his bank account was garnished or that he exhausted his administrative remedies before filing his claim.

R. Porter, DC Iowa, 2008-2 USTC ¶50,479

Other References:

 
Code Sec. 3401

  CCH Reference - 2008FED ¶33,538.5056

 
Code Sec. 6015

  CCH Reference - 2008FED ¶35,192.23

 
Code Sec. 6203

  CCH Reference - 2008FED ¶37,514.23

 
Code Sec. 6212

  CCH Reference - 2008FED ¶37,544.20

 
Code Sec. 6320

  CCH Reference - 2008FED ¶38,134.20

 
Code Sec. 6501

  CCH Reference - 2008FED ¶38,967.599

 
Code Sec. 7433

  CCH Reference - 2008FED ¶41,778.14

  Tax Research Consultant

  CCH Reference - TRC PAYROLL: 9,306

  CCH Reference - TRC IRS 27,212

  CCH Reference - TRC IRS 30,202.25

  CCH Reference - TRC IRS 30,254

  CCH Reference - TRC IRS 45,114