Radweb Technologies LLC is considered an "Alter Ego" of Steve Repetti. The IRS defines an "Alter Ego" as the following:
Alter ego essentially means a "second self." It is a doctrine that allows the law to disregard an entity’s separate legal identity in order to extend liability and prevent abuse. Using an alter ego theory, if an individual is the alter ego of a corporate taxpayer or other legally distinct entity, then that individual’s assets may be used to satisfy the debts of the corporate taxpayer. This is sometimes called "piercing the corporate veil."
Similarly, if a corporation or other legally distinct entity is the alter ego of a taxpayer, then the assets of that entity may be used to satisfy the debts of the individual taxpayer. This is sometimes called "reverse piercing of the corporate veil."
An alter ego generally involves a sham corporation used to avoid legal obligations. To establish an alter ego, such that an alter ego Notice of Federal Tax Lien may be filed, it must be shown that the shareholders disregarded the corporate entity and made it an instrumentality for the transactions of their own affairs.
Counsel's position is that federal common law, rather than state law, governs alter ego status. See Chief Counsel Notice CC-2012-002 (Dec. 2, 2011). Contact Area Counsel with questions regarding the applicable law.
No one factor determines whether an alter ego situation is present, but a number of factors taken together may. The following list is neither exhaustive nor exclusive, but alter ego situations typically involve one or more of the following:
Commingling of corporate and personal finances and use of corporate funds to pay personal expenses.
Unsecured interest-free loans between the corporation and the shareholder.
The taxpayer is a shareholder, director, or officer of the corporation, or otherwise exerts substantial control over the corporation.
The corporation is undercapitalized relative to its reasonable anticipated risks of business.
A failure to observe corporate formalities, e.g. issuance of stock, payment of dividends, director and shareholder meetings, or the maintenance of corporate records.
A failure to disregard the corporate fiction presents an element of injustice or "fundamental unfairness."
In an alter ego case, a special condition NFTL is used, identifying, in the name line of the NFTL before the taxpayer's name, the third party as the alter ego. For example, if the taxpayer is TP, and ABC Inc. is TP’s alter ego, then the NFTL name line would read "ABC, Inc., as Alter Ego of TP."
Area Counsel approval is required prior to filing a Notice of Federal Tax Lien naming an alter ego. See both 18.104.22.168.2Alter-Ego Lien Notices and IRM 22.214.171.124.4(6) through (8), Special Condition NFTL Approval Process: Request, Advisory Review, and Post-Approval.
Generally, an alter ego should not be asserted in transactions involving only individuals.