In Uncategorized on 07/22/2020 at 16:54

I was just now on-lining a CLE from a title insurer. One presenter noted that religious associations and entities, and non-profits generally, are very poor on organic documents and command structure. Though some have boards of trustees with savvy members, for many trustees this means having a second job with no pay other than intangible spiritual benefits.

Wherefore we get Ike K, an officer of Congregation Bais Yaakov, 2020 T. C. Sum. Op. 21, filed 7/22/20. According to STJ Daniel A (“Yuda”) Guy, CBY really tried with its FICA/FUTA/ITW.

“Generally speaking, petitioner timely files Forms 941, Employer’s Quarterly Federal Tax Return, and timely pays its Federal employment tax liabilities. On occasion, however, petitioner has filed Form 941 late and remitted Federal employment tax deposits after the due date. For some taxable periods the IRS issued refunds to petitioner in respect of its Federal employment tax overpayments, and for other periods petitioner requested that the IRS apply its overpayments to satisfy its Federal employment tax liabilities for other taxable periods–a so-called credit elect overpayment.” 2020 T. C. Sum. Op. 21, at p. 5.

The problem starts when IRS hits CBY with Section 6651 late-file, late-pay, and Section 6656 non-deposit chops, and used some overpayments to offset. Ike K says he asked IRS to abate hits and chops, and back-credit CBY. IRS says they sent CBY a rejection, but Ike K says neither he nor CBY has any record of the bounced request to abate. This left CBY short, so IRS gave CBY a NITL. Ike K goes to Appeals timely, and says that if certain years not at issue were re-examined, and the hits and chops abated, CBY would be square.

Appeals says they can’t look at other years, but file Form 843 Claim for Refund and Request for Abatement, and let’s talk IA.

Ike K doesn’t, and petitions.

Ike K claims credit elect, so that if the overpayments from previous years were applied to year at issue, and the hits and chops abated, CBY would be square.

STJ Yuda. “The record reflects that neither the IRS nor any court has determined that petitioner is credited with an overpayment that is available to be applied to offset the unpaid balance of employment tax due for the period in issue. Although petitioner maintains that additions to tax and penalties assessed for earlier taxable periods should be abated, those matters remain unresolved and do not fall within the Court’s jurisdiction in this case. See, e.g., Murphy v. Commissioner, T.C. Memo. 2019-72, at *8-*9. In the context of this action, there is no support for petitioner’s credit elect overpayment claim.

“The record reflects that petitioner failed to make adequate employment tax deposits for the period in issue. Although Mr. K suggested that petitioner was interested in entering into an installment agreement, he failed to provide the financial information that the Appeals Office needed to evaluate petitioner’s eligibility for an alternative to the proposed levy action.” 2020 T. C. Sum. Op. 21, at p. 10. (Name omitted).

For the skinny on Murphy, supra, as my No. 10 Tanqy-swilling colleagues would say, see my blogpost “A Claim Is Not a Credit – Part Deux,” 6/11/19. Pretty much tells the story.

I see STJ Yuda credits former Jersey Boy Larry with a pro bono assist at calendar call. Good job, Mr. S.

BTW, the title co. presenter told a war story about needing an approval from His Holiness the Pope for sale of a convent. She didn’t say how she got it, but it would be the ultimate war story if, sitting at the closing table at 8 p.m. on a steamy summer night, she talked her way past the Swiss Guards and a platoon of Cardinals, and got His Holiness on the hoot ‘n’ holler in the middle of the conference room table to voice his consent. She’d get the Taishoff “Ultimate War Story with (metaphorical) Diamonds.”




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