 IRS
Issue Resolution
Miller Grossbard & Associates gained a new client in a somewhat
unusual way. It seems that a tax attorney designed a reorganization
for one of his clients. The purpose of the change was to shield
the owner from liability while minimizing the tax burden. Part
of the client's operations was placed in a newly formed company,
which was to make an S Corporation election for tax purposes.
The client's CPA, who was heavily involved in the reorganization
planning, failed to submit the S election to the IRS before
the deadline.
Without the S election, the new entity would be taxed as
a C Corporation. The IRS denied the S election because of
its untimely filing and assessed more then $200,000 in taxes.
The client's CPA was unsuccessful in changing the IRS' position
regarding the tax liability.
The client decided that it was time to find a tax professional
who could convince the IRS to alter its position. The client
interviewed several firms and checked references. Miller Grossbard
was selected.
Intensive interviews were conducted by Miller Grossbard to
learn the facts of the situation. Conferences were held with
the client, the tax attorney who had initiated the restructure,
and the client's CPA. After learning the details of the restructuring
and the intent of the parties, Miller Grossbard prepared a
Private Letter Ruling, which was submitted to the IRS. Following
months of discussions with the Washington office to resolve
the issues, the IRS granted relief and dismissed the tax assessment.
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