Opinion ID: 152235
Heading Depth: 2
Heading Rank: 1

Heading: Unpaid Taxes

Text: Anuforo was the sole owner of Comfort Plus and U.S. Central, and Anuforo was the person responsible for ensuring the companies' employment taxes were paid. Despite this responsibility, Anuforo consistently failed to pay each companies' employment taxes. [2] At issue in this case are several calendar quarters during which Comfort Plus and U.S. Central failed to file timely returns and make full payment of employment taxes. Comfort Plus failed to file timely employment taxes or make any payment for eight calendar quarters at various times from 1999 through 2003. Similarly, U.S. Central failed to make full payment of its employment taxes during seven calendar quarters at various times from 1999 through 2003. Of these seven calendar quarters, Anuforo filed all but one return late, and he made no payment at all for five of the seven quarters. Initially, the IRS worked with Anuforo on the delinquencies and short-payment of taxes. In July 2000, the IRS agreed with Comfort Plus and U.S. Central to address specific quarters of delinquent or underpaid taxes in 1999 through installment agreements. Under these agreements, Anuforo agreed to make installment payments and to extend the time during which the IRS could assess penalties against him for his failure to make payments during the specified periods in 1999. The agreements provided the IRS could assess penalties for these periods until December 31, 2010. Both companies defaulted on their agreements with the IRS when, for various periods in 2000 and 2001, Comfort Plus and U.S. Central failed to file on time and to pay their tax returns. The IRS repeatedly informed Anuforo he would be in default if he failed to remain current on the companies' tax obligations. On March 22, 2002, the IRS mailed a letter to each company notifying them they were in default. On June 4, 2002, Anuforo notified the IRS two of his employees had been convicted of embezzling funds from his companies, and claimed the embezzlement was the reason he was unable to pay his tax obligations. One employee admitted to embezzling approximately $20,000 from both companies from August 15, 1999, until 2001. Anuforo later acknowledged the employee had repaid $21,000 by the second quarter of 2002. A second employee admitted to taking $50,861.24 from Comfort Plus from April 27, 2001, until January 18, 2002. This employee was required to pay restitution in the amount of $165,040.74, but it is unclear from the record if restitution was made. Comfort Plus's income tax returns included deductions for fraud loss in 2001, 2002, and 2003. Despite the embezzlement, Comfort Plus and U.S. Central filed tax returns in 2001 and 2002 acknowledging the companies' payment of over $1 million in wages and hundreds of thousands of dollars in other expenses. On March 1, 2004, and April 8, 2004, the IRS issued certified letters to Anuforo, proposing penalties for U.S. Central's and Comfort Plus's unpaid taxes, and providing 60 days to appeal the proposed penalties. On May 19, 2004, Anuforo filed a timely appeal as to Comfort Plus, and an untimely appeal as to U.S. Central. The IRS Appeals Office sustained the penalties on October 25, 2005. The IRS assessed penalties against Anuforo on February 14, 2005, for U.S. Central's delinquent taxes, and on December 26, 2005, for Comfort Plus's delinquent taxes.