C-Corp had old payroll tax debt forgiven (CSED - collection statute expiration date). Is that taxable? Or not? Is it even forgiven or is it still owed but the IRS can't collect?
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Cash or accrual basis taxpayer? What type of payroll taxes? Trust fund taxes would likely have been deducted in the prior year as salaries & wages. Employer taxes, maybe or maybe not. If it was written off in a prior year then it should probably be written back on (pending insolvency calculation).
if a 941 was filed the IRS has 3 years from the time the 941 was filed to assess the tax penalty. Did your client ever file the 941
Unless the corporation is insolvent, I don't see why it would not be taxable.
Cash or accrual basis taxpayer? What type of payroll taxes? Trust fund taxes would likely have been deducted in the prior year as salaries & wages. Employer taxes, maybe or maybe not. If it was written off in a prior year then it should probably be written back on (pending insolvency calculation).
For an "on the one hand this but on the other hand that" discussion, see
I wonder how many solvent corporations the IRS is allowing off the hook without enforced collection before the statute expires. Also, are you sure it has expired? Who told you?
Accrual. A bit of 940, but also 941. There was an installment agreement.
Thanks for responding!
Interesting citation. There was an installment agreement and the annual statement shows the balances being removed due to CSED.
Thanks for your response!
Got it, thank you!
Yes, 941s were filed. This wasn't a 941 penalty, it was the 941 taxes themselves.
Thanks.
Thanks for the response, much appreciated!
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