Federal unemployment for a closed corp

Have a client who has a dissolved corporation.

His dissolved company just got a notice with an intent to levy for monies owed for Form 940
stemming back a few years ago.

Does he have any personal obligation to pay this?

Can he, personally, suffer detriment for not paying?

The company was dissolved in 2017.

Have a client who has a dissolved corporation.

His dissolved company just got a notice with an intent to levy for monies owed for Form 940
stemming back a few years ago.

Does he have any personal obligation to pay this?

Can he, personally, suffer detriment for not paying?

The company was dissolved in 2017.

Did client know the corporation owed to money before it was dissolved?

he didn't ...he's oblivious to these things

Unless the liability is really significant and the individual got a large liquidation dividend making him liable as a transferee under IRC 6901 and the account was assigned to a revenue officer who is sharper than most, IRS will probably classify the account "currently" not collectible as a defunct corporation. In my state, California, the state will go after the individual so here, it's which foot do you want to get shot in.

thank you for response..so even for a 940 (which is not trust funds), the IRS will go after you if there is a large liquidating dividend?

IRS could go after a stockholder as transferee on the liquidation of a corporation but as a practical matter probably won't. In 35 years as a revenue officer with IRS I only worked one transferee case involving employment tax. If this was my client I would respond to the demand with a letter that stated that the corporation went out of business X years ago and see what happens after that. You should also ask the principals of the corporation if the state has since been paid because that would make most of the federal liability go away.

thank you ms....why would paying hte state remove the federal liability?

Paying the state removes all but .6% (previously .8%) of the Federal liability because the Feds only collect a small portion of the overall FUTA tax to run the Federal Unemployment Trust Fund loan to states that don't have enough money to pay unemployment benefits.

If you haven't paid the state, the IRS can collect all of the 6% of the FUTA tax.

"....In my state, California, the state will go after the individual so here, it's which foot do you want to get shot in.

LOL, mscash. May I borrow that quote?

I do get royalties.

As to reducing the additional tax as skassel states paying the state removes the additional federal liability but in the case of late payment the adjustment is only 90% of the late payment. In the great scheme of things state tax pays benefits and federal tax pays the program overhead.