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IT WILL BE A COLD DAY BEFORE THIS COMPANY GETS ITS TAXES PAID

August 15, 2007

Businesses that fall behind on their payroll taxes sometimes seem to believe that there's no hole too deep for their lawyers to dig out of. Duluth, Minnesota web design firm Fifty Below Sales and Marketing, Inc. learned otherwise yesterday; the Eighth Circuit Court of Appeals ruled that the IRS was permitted to levy on their accounts without offering an installment payment plan.

From the court opinion, it sounds like Fifty Below had failed to keep up with two tax installment payment plans already, and had failed to keep up with it's current payroll tax obligations. Either failure is enough to get you in hot water - which sometimes is welcome in Duluth, but not this time. From the opinion (citations omitted):

This excerpt shows that the appeals officer took into account Fifty Below's history of failure to live up to two previous installment agreements and an earlier proposed Offer in Compromise, as well as its noncompliance with current obligations. These are legitimate considerations weighing against accepting a taxpayer's offer. He also took into account the multi-million dollar size of the taxpayer's existing liability, plus the fact that Fifty Below had continued to fall further and further behind as time went on, which the IRS refers to as "pyramiding" taxes, and which legitimately weighs against a taxpayer's request for a second (or third or fourth) chance.

Bottom line? The IRS might put Fifty Below six under.

Citation: Fifty Below Sales & Marketing Inc. v. United States; Nos. 06-3244, 06-3245

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