Debtor Not Entitled to Payroll Tax Refund; Commingled Funds Not Debtor’s Property (In re Mirabilis Ventures, Inc., BC-DC Fla.)

A debtor corporation was not entitled to a refund of payroll taxes it claimed were improperly paid on behalf of nondebtor sister companies. The debtor’s argument that it did not own the nondebtor companies and was not obligated to pay taxes on their behalf and, therefore, was entitled to a refund, was rejected. The debtor was not entitled to a refund of the payments it made to the IRS on behalf of the nondebtor companies because the funds were not the debtor’s to recover. The funds deposited in the debtor’s account were the combined payroll of each corporation in the group. Moreover, commingling the funds did not transform the money into the debtor’s property under state (Florida) law and the record did not show that the nondebtor companies intended to transfer ownership of the funds to the debtor corporation.

In re Mirabilis Ventures, Inc., BC-DC Fla., 2012-1 USTC ¶50,287

Other References:

Code Sec. 6871

CCH Reference – 2012FED ¶40,630.12

Tax Research Consultant

CCH Reference – TRC IRS: 33,050

CCH Reference – TRC IRS: 33,358.05

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

All stories by: Wolters Kluwer Tax and Accounting