Another ADI bond article in need of comment

[dhdunbar]

A second bond article in the recent ADI newsletter is in need of comment.  It was written by an attorney, and who am I to challenge that - well, I did serve as a hearing office who listened to attorneys squabble and had to decide which, if either, made sense, but here are my comments.  You can read the article for yourself.  It's entitled "Dropping your bond: thrifty or risky.  I'll not quote it here.  Here is how I responded to the article after I first read it in Artisans Spirits Magazine:

 

All applications for bonds with which I am familiar carry indemnification clauses. At least two persons must individually indemnify the surety against loss, if there is more than one person who is a principal, as must the entity in whose name the bond is issued, before the surety will issue the bond. I can assure you that the sureties do not see themselves as the deep pockets that will ultimately get stuck with the bill if you can’t pay. Their attorneys will protect them against that. Default on tax payments and if you have any assets, you will likely find yourself in front of a judge in a civil asset discovery hearing.

Further, before TTB will go against the surety, it is likely that it will provide the proprietor of the DSP with an opportunity to submit an offer in compromise to compromise all or portion of the tax liability in the proprietor is for some reason unable to pay what is owed. You can see examples of such offers on TTB’s website.

I  think TTB seldom pursues payment from a surety, but I have no data to substantiate that claim.

The advice given in the article is given by an attorney. I am not an attorney and my advice is not legal advice, but neither is his in this context. If you are concerned about risk-reward calculations, consult your personal attorney.

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