A regarded business entity gets an accepted OIC for FICA/FUTA/ITW, but a responsible person gets tagged for the full TFRPs. That’s the plight of Thomas Amodio, T. C. Memo. 2026-96, filed 9/28/26.

But to the rescue comes STJ Lewis (“Oh That Name”) Carluzzo, who employs “common sense and the general principles that govern joint and several federal tax liabilities,” T. C. Memo. 2026-96, at p. 6, to bail out Amodio.

Amodio’s closely-held C Corp did high-class carpentry and was a union shop. Between slowpaying customers and union contracts, Amodio’s office manager and third-party payroll processor paid the union and workers first, and Amodio knew it. Noble motive, but the gov’t comes first. Amodio’s willfulness argument craters.

IRS says C Corp’s OIC has nothing to do with Amodio’s liability.

“IRM 5.8.4.22.1(2) (May 10, 2013) states that the settlement of an outstanding liability by an offer-in-compromise with a corporation does not eliminate the TFRP liability of a responsible person and may still be collected from the responsible person.” T. C. Memo. 2026-96, at pp. 5-6. (Footnote omitted, but it says the current version of that IRM is IRM 5.8.4.21.1(2) (Apr. 25, 2025)). And IRM is cited as “policy,” not law or reg.

After copious citation of what limited precedent there is, STJ Lew finds Amodio’s rescue in one word.

“There might be circumstances that ‘may’ support respondent’s decision to collect from a responsible person a TFRP liability that exceeds a corporation’s related employment tax liability that has been adjusted by an offer-in-compromise, but in the absence of a specific reason for doing so in this case we are more persuaded to proceed by applying common sense and the general principles that govern joint and several federal tax liabilities.

“In so doing, it follows and we hold that respondent may proceed with collection as determined in the Notice but only in amounts that do not exceed the amount of [C Corp]’s employment tax liability for each period in dispute, as adjusted by the offer-in-compromise.” T. C. Memo. 2026-96, at p. 6.