Client: Restaurant owner operating two locations through an S-Corporation
Problem: The client fell behind on Form 941 payroll tax deposits over six quarters, accumulating $156,000 in unpaid employment taxes (including penalties and interest). After ignoring CP14, CP501, and CP503 notices, the client received CP504B. A Revenue Officer was assigned and began the Form 4180 investigation to assess the Trust Fund Recovery Penalty against the owner personally.
The Stakes: The trust fund portion of the $156,000 was approximately $112,000. The IRS was preparing to assess this amount against the owner personally under IRC § 6672 — in addition to the business liability. The owner’s personal home, savings, and future wages were at risk.
Global Gate’s Approach: 1. Immediate intervention — We contacted the Revenue Officer to request a temporary hold on enforcement while we prepared financial disclosures 2. Form 4180 representation — Our team represented the owner during the TFRP investigation, demonstrating that a former bookkeeper (who had since been terminated) shared responsibility for payroll decisions 3. Business resolution — We negotiated a 60-month business installment agreement for the full $156,000 business liability at $2,600/month, structured to keep the restaurants operational 4. Personal TFRP resolution — For the owner’s personal TFRP assessment (ultimately reduced to $89,000 after shared responsibility allocation), we submitted an Offer in Compromise based on the owner’s limited personal assets and income separate from the business 5. OIC accepted — The IRS accepted an OIC of $23,000 for the personal TFRP liability — a savings of $89,000 from the assessed amount
Timeline: 8 months from initial contact to full resolution
Result: The business continued operating, the owner avoided devastating personal asset seizures, and the total resolution saved the client approximately $89,000 in personal liability. Both restaurants remain open today with a compliant payroll tax system in place.