Loan VCP for Owner

[austin3515]

Can people share success rats for a VCP for an owner's loan (owns 50% of the business)? Suffice it to say, the participant did not make the majority of payments in the first year, so "way behind."

 

[Mike Preston]

100% so far (1 out of 1 with a letter; there is also 1 currently submitted that we haven't heard back yet).  What correction are you proposing?

[austin3515]

Reamortize to be repaid within original 5 year window.  We just don;t have a great excuse for why it wasn't repaid.  Essentially he had no money and was paying off other things.

[Mike Preston]

That is precisely what I have pending at the moment.  Bug me every once in a while for an update.  The good news is that they haven't rejected the filing (yet).  I told the client that there was no guarantee that the IRS would accept the correction and so the client is prepared for an alternate correction (deemed default/taxable income - hopefully in current year rather than a prior year).