EO Employment — Internal Revenue Manual Part 4. Examining

CLOSING AGREEMENT AS TO FINAL DETERMINATION COVERING SPECIFIC MATTERS UNDER SECTION 7121 OF THE INTERNAL REVENUE CODE

Under section 7121 of the Internal Revenue Code of 1986, as amended (the "Code"), xxxxx ("Taxpayer"), (Address), EIN: xx-xxxxxxx, and the Commissioner of Internal Revenue (the "Commissioner") (collectively the "Parties") enter into a Closing Agreement as to final determination of tax liability and specific matters:

WHEREAS, the Taxpayer is exempt from federal income tax as an organization described in section 501(c)(xx) of the Code; and

WHEREAS, during the taxable periods (month, day, year) through (month, day, year) (the "Applicable Tax Periods"), the Taxpayer represents that it (describe situation) to certain employees (the "Affected Employees");

WHEREAS, during the Applicable Tax Periods, the Taxpayer did not treat the (describe situation) as "wages" to the Affected Employees for income and employment tax purposes by reporting the (describe situation) on Forms W-2 and 941 and appropriately withholding and depositing applicable taxes; and

WHEREAS, the Taxpayer has voluntarily disclosed to the Commissioner the income and employment tax withholding and reporting errors made during the Applicable Tax Periods; and

WHEREAS, Taxpayer represents that it has instituted procedures to ensure future compliance with the reporting and withholding requirement issues set forth in this Closing Agreement; and,

WHEREAS, Taxpayer is not under examination by the IRS for employment or income tax matters, and any tax years referenced have not been examined for employment or income tax purposes; and

WHEREAS, the Commissioner, through his authorized representative(s) and the Taxpayer, through its authorized representative(s) have determined that final resolution of the Taxpayer's income tax withholding obligations and employment tax liabilities according to the terms of this Closing Agreement as to final determination of tax liability and specific matters set forth herein is in their respective best interests.

NOW THEREFORE IT IS HEREBY DETERMINED AND AGREED BETWEEN TAXPAYER AND THE COMMISSIONER AS FOLLOWS for federal employment tax purposes that:

(1) Taxpayer is liable for and will pay $XXXX Dollars and No Cents, in full discharge of all income tax withholding, and employment tax liabilities due on the wages arising to the Affected Employees’ (explain situation) during the Applicable Tax Periods, as follows:

Year

Federal Income Tax Withholding

Social Security Tax

Medicare Taxes

Total Tax Due

xxxx

$x,xxx

$xx,xxx

xxxx

$x,xxx

$xx,xxx

xxxx

$x,xxx

$xx,xxx

Taxpayer will remit the total amounts set forth in paragraph (1) above by certified check, cashier’s check, or similar instrument payable to the United States Treasury prior to, or contemporaneously with, the execution of this agreement by the duly authorized representative of the Commissioner. Payment should be sent to the following address:
The Taxpayer agrees that the Service may assess the taxes contained in paragraph 1 above against the Taxpayer, as required by law, and waives all defenses against and restrictions on the assessment and collection of the liability, including any defense based on the expiration of the statute of limitations on assessment of tax with respect to the taxable periods for such amounts.
Any adjustment to the employment taxes paid by the Taxpayer pursuant to this Closing Agreement shall be made without interest pursuant to Code section 6205(a)(1) and Treasury Regulation section 31.6205-1.
No penalty shall be imposed on Taxpayer with respect to its failure to properly report and withhold employment taxes from the payments.
The Taxpayer will file a Form W-2c, Corrected Wage and Tax Statement, for each Affected Employee with the Social Security Administration, reporting the increased Medicare and social security wages in Box 3 and Box 5, respectively. Box 1 will not include the increased wages for federal income tax purposes.
The Taxpayer shall furnish a copy of the Form W-2c, Corrected Wage and Tax Statement, described in paragraph 6, to each Affected Employee.
Nothing in this Agreement shall be construed as a limitation on the Commissioner’s ability to adjust the tax liabilities of Taxpayer for any taxable period, except as expressly provided for in this Agreement. Further, this Agreement does not prevent the Commissioner from examining Taxpayer and determining adjustments for any tax periods covered by this Agreement for unrelated matters.
This Closing Agreement and resolution of issues herein does not qualify as an examination or inspection under Code sections 7602 or 7605(b), or as an audit for purposes of Section 530 of the Revenue Act of 1978.
The Taxpayer agrees not to file any future claims with respect to the specific items contained in this Closing Agreement.
This Closing Agreement constitutes a resolution under the Code of the specific matters discussed herein. No inference shall be made with respect to whether this resolution satisfies other federal or state law.
This Closing Agreement may not be cited or relied upon by any person or entity as precedent in the disposition of any other case.

This Closing Agreement is final and conclusive except:

The matters to which it relates may be reopened in the event of fraud, malfeasance or misrepresentation of material fact;

It is subject to the sections of the Internal Revenue Code that expressly provide that effect be given to their provisions (including any stated exception for Section 7122 of the Code) notwithstanding any other law or rule of law; and

If it relates to a tax period ending after the date of this Closing Agreement, it is subject to any law, enacted after such date, which applies to the taxable period.

IN WITNESS WHEREOF, the above Parties to this Closing Agreement as to Final Determination of Tax Liability and Specific Matters have executed this Closing Agreement in triplicate on the dates indicated below. By signing this Closing Agreement, the Parties certify that they have read and agreed to its terms.

TP Name:

EIN:

By: ______________________________ Date signed:____________________

Name: _________________________________________

Title: ___________________________________________

COMMISSIONER OF INTERNAL REVENUE

Name: _________________________________________

Title: Director, EO Examinations