Livingston, MT asked in Tax Law for Montana

Q: Can IRS garnish shareholder's personal monies for corporation tax debt?

I received an IRS notice for penalties and interest for late filing of 2015 and 2016 corporate tax returns for a Montana close corporation. They incorrectly identified 2 shareholders so I wrote a letter explaining: there was 1 shareholder; I had erroneously been told by what I thought was a valid source that I did not need to file tax returns since the corporation had not conducted business for many years; I realized my error when the Montana DOR notified me of failure to file; and I immediately filed both state and Federal returns. I received a Notice of intent to seize (levy) your property or rights to property in a reduced amount of $4,697.98 (for a single shareholder?). The corporation is in good standing with the Montana SOS but has not done business since 2007. It has no assets, bank accounts or property. Is the shareholder responsible for this debt? If so, should I send a partial payment with an offer in compromise?

Related Topics:
1 Lawyer Answer
Linda Simmons Campbell
Linda Simmons Campbell
  • Tax Law Lawyer
  • Burlington, CT

A: It sounds like you were charged a failure to file penalty. Sometimes the IRS will abate the penalties once you have filed the required returns. I suggest filing a penalty abatement request. If that does not bring the debt down to an amount you can afford then you can try and submit an Offer in Compromise. The IRS has an Offer in Compromises tool on their website that you can use to see if you might be eligible.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.