To limit tax trouble, follow the rules. One taxpayer was the sole shareholder of a limited liability company (LLC) when the IRS assessed a harsh penalty for the LLC’s unpaid tax. She sought a refund, claiming that the penalty was assessed outside the statute of limitations. The IRS noted that the statute of limitations hadn’t been triggered, because she failed to file Form 944, Employer’s Annual Federal Tax Return. Instead, she filed forms that she said had enough data to calculate her company’s tax bill, but which the IRS had expressly rejected because they were incorrect for LLCs. For this and other reasons, the U.S. Tax Court denied her refund. (Lagerkvist, U.S. District Court, 2/29/24)
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