The Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB) collects alcohol and cigarette excise taxes for the federal government. Like the IRS, the TTB goes after those who do not pay their fair share of taxes and can (within reason) negotiate the amount due. So the TTB recently announced that it accepted two offers in compromise (OIC) to pay less than the amount they initially owed.
Cooperstown Distillery, LLC
The Cooperstown, New York, distillery failed to pay excise taxes between January 1, 2017, and September 30, 2019, for the distilled spirits it manufactured. The initial tax bill was $45,599.79, but the TTB accepted 32,500. Cooperstown also included $5,000 in its offer as good faith to pay the remaining amount of 27,500 within ten business days of the TTB’s accepting the OIC. The reason for taking the offer was doubt of liability.
Sara, Inc. DBA US 31 Tobacco
The South Bend-based tobacco manufacturer made $20,000 OIC for the tax debt of $145,885.51. The company failed to pay excise taxes, a special occupational tax and an operating permit before commencing manufacturing tobacco products. The proponent offered to make five consecutive monthly payments of $4,000 starting in May of 2021. The reason they accepted this offer was doubt of liability.
These numbers are not random
The amounts of the OIC are based on arguments made by the businesses arguing doubt of liability. Those who get unexpected or unexpectedly large excise tax bills can turn to an attorney who handles alcohol and tobacco law matters for businesses. If they have a knowledgeable attorney and good reason for a lower tax obligation, it is well worth a business’s time and effort to attempt to get an OIC.