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Posted by somebody on December 13, 2006, 10:38 pm
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In the early 90's I formed a corporation (In Delaware but
live in Pennsylvania) which consisted of myself only, as the
CEO. The business failed, but I never dissolved it. I just
received a letter from the Penn Credit Corporation which is
a collection agency. They want to collect almost $7,000
from me. I called the PA Department of Revenue, and they
said that back in 1994 that they attempted to contact me
about a jeopardy settlement or some such. They said the
amount was $5,700, not $7,000, and that there was nothing
they could do with the case. So, I called Penn Credit and
asked how we got from $5,700 on Dec. 1 to $7,000 12 days
later. I was told that this was an additional penalty added
for the delinquency being referred to a collection agency.
Anyway, my question is, as an individual, am I responsible
for paying this tax? I thought one of the advantages of a
corporation was to insulate the individual from the company?
I would prefer to dissolve the corporation and not have to
pay this "penalty".
-Thanks
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Posted by Stuart A. Bronstein on December 15, 2006, 9:59 am
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> In the early 90's I formed a corporation (In Delaware but
> live in Pennsylvania) which consisted of myself only, as the
> CEO. The business failed, but I never dissolved it. I just
> received a letter from the Penn Credit Corporation which is
> a collection agency. They want to collect almost $7,000
> from me.
> Anyway, my question is, as an individual, am I responsible
> for paying this tax? I thought one of the advantages of a
> corporation was to insulate the individual from the company?
> I would prefer to dissolve the corporation and not have to
> pay this "penalty".
Probably not. It partly will depend on relevant state law,
and partly on if you took any money out of the corporation
personlly (and if so how much and for what purpose).
This kind of thing comes up in California all the time. The
Franchise Tax Board will send assessment notices for a
couple of years, suspend your right to transact business and
eventually give up.
Stu
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Shyster1040 on December 16, 2006, 8:39 pm
Please log in for more thread options You have to check under Pennsylvania state law. For
example, under federal law, a corporate officer, director,
or shareholder is not generally personally liable for a
corporation's unpaid taxes; however, under 31 USC Sec. 3713,
if the federal tax liability had accrued as of a certain
date, and you, as director and officer, caused the
corporation to make payments to other creditors, you can be
held personally liable for the unpaid amount of that federal
tax liability if, under Sec. 3713(a), that liability had
priority over the other debts (which it usually does), and
you were aware of enough facts that you were on notice that
the federal tax liability existed. For example, if you
decided to liquidate a corporation in January of 2007 and
knew, or should have known, on the basis of the books the
corporation is required to keep under federal income tax
law, that the corporation had a net profit for 2006 (not
offset by any NOL carryovers), and chose liquidate the
corporation, pay off the trade creditors, and dissolve
without making any arrangements to have the federal income
tax liability for 2006 paid off, you would be personally
liable for that unpaid liability, even if the corporation
did not have enough cash after liquidation to fully pay off
both the trade creditors and the IRS.
Bottom line is, you need to check into PA law to see if
there is any similar provision that would apply to your
situation.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Stuart A. Bronstein on December 15, 2006, 10:05 am
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> In the early 90's I formed a corporation (In Delaware but
> live in Pennsylvania) which consisted of myself only, as the
> CEO. The business failed, but I never dissolved it. I just
> received a letter from the Penn Credit Corporation which is
> a collection agency. They want to collect almost $7,000
> from me.
> Anyway, my question is, as an individual, am I responsible
> for paying this tax? I thought one of the advantages of a
> corporation was to insulate the individual from the company?
> I would prefer to dissolve the corporation and not have to
> pay this "penalty".
Probably not. It partly will depend on relevant state law,
and partly on if you took any money out of the corporation
personlly (and if so how much and for what purpose).
This kind of thing comes up in California all the time. The
Franchise Tax Board will send assessment notices for a
couple of years, suspend your right to transact business and
eventually give up.
Stu
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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