Thursday, December 25, 2008

Paying Tax On Gifts

I had a conversation with a taxpayer the other day concerning what they should do in regards to their tax liability. Apparently a friend loaned them some money to go into business together and the business went under. Therefore the partner that loaned him the money was upset and 1099'd the other partner. What the loaner should have done was paid the tax on the money loaned to the individual versus insisting on payee assuming responsibility for it.

This taxpayer now owes liabilities up to $140,000 dating back from 1993-1994. Some $40,000 in penalties and interest have accrued since then. What I advised him to do is get into an Installment Agreement and pay this until the CSED (Collection Statuatory Expiration Dates)dates run out. What the IRS does not inform you of is the time they have to collect on you. If this taxpayer can hold on till the CSED dates run out, he will no longer be responsible of the debt.

If you need taxpayer assistance, don't hesitate to call a licensed individual that can help you.

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