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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 89586
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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CA sales tax for my corporation I was screwed by my accountant

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CA sales tax for my corporation:
I was screwed by my accountant that didn't file anything for my corporation for the last year and a half. The CA BOE revoked my license and also sent a inflated estimated bill for the unpaid sales tax that we owe. I don;t have enough to pay it and they are charging a huge penalty in the next 30 days if not paid. Is there a way they will work out a payment plan? or am I just tough out of luck and all my inventory and everything is gone!
is there a legal/ethical way to open a new corp and dump the inventory into it while I work out how to pay back the tax owed on the current corp? please let me know any wisdom you might have in this situation. I want to do whats right but also know how to play the chips. Thanks so much! -Tim :)
Submitted: 4 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 4 years ago.
There are no legal/ethical ways to "dump the inventory" into a new corporation unless you can have the new corporation come up with the money to actually buy the inventory and that money would have to go to pay the taxes owed. Your company is going to need an attorney to represent it, since a corporation cannot be represented in legal matters by the owner/manager/operator because it is considered the unauthorized practice of law. There are many times the attorney can indeed work out a payment plan with the state to repay the back taxes. The other thing your attorney would do is file suit against the accountant for negligence and malpractice and hopefully the accountant had errors and omissions insurance or malpractice insurance to cover this failure and you can seek to recover damages from them or from the accountant in suing the accountant personally. But yes, the attorney can work out some payment plan with the state for the repayment of the taxes and perhaps even get some reduction of the penalty.

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Customer: replied 4 years ago.
1)can't a CPA contact the state BOE for me to work out a payment plan, I didn't think it had to be an attorney?

2)my main focus is figuring out how much I owe the state in CA sales tax that I collected. Do I have to have all the corporate tax returns and reports and everything done to file that or is it as easy as just adding up what I collected, I need the quickest and easiest way to figure out what I owe, negociate a break on fees and possible payment plan.

I'm scrambling to do the following to try and get everything resloved, can you let me know if the following seams like a good option or any advice or places you could lead me to help or any good accountant, cpa, tax attorney or anything?

I was thinking I would have someone set up quickbooks for my business (just have a bunch of invoices and records not entered in anything), then have a book keeper enter everything. If I do that, is that mainly all I need for a CPA to figure out everything for what needs to be filed for everything related to the corp for the last year and a half.
Thanks again so much!!! -Tim :)
Expert:  Law Educator, Esq. replied 4 years ago.
1) A CPA can do this, but you work out better many times using an attorney that specializes in corporate tax laws and the costs end up about the same. It also can end up being more economical because you should be pursuing the first CPA for the malpractice anyhow and that same attorney can do both which saves on time and makes it more economical. But a CPA can do this if you wish.

2) If it is a sales tax issue, then putting together the proof of all of your sales is going to be the fastest way to try to resolve the matter.

3) You are going to have to set something up to record all of your sales, no matter whether you use a CPA or an attorney. Actually, most attorneys that handle these matters are CPA's or have CPA's working with their firms.

The best place to find a local attorney that handles corporate tax issues is the same place used by other attorneys, http://www.martindale.com or http://www.findlaw.com.
Customer: replied 4 years ago.
1)im not going to file a malpractice suit, hes long gone and has hundreds of people after him. I'm confused about your statement that the costs add up to about the same. I need a CPA to file my taxes and everything once I get everything in quickbooks right? or are you saying a tax attorney can file them and negociate fees and it will be around the same cost? I would think an attorney doing it would be much higher? but maybe still worth it?

2)so I can just print all my payments recived and get a total amount of tax received (without filing anything else for the corp and have a CPA or attorney figure it all out with the state BOE?
what proof do I need, just print outs of the payments and don;t they just need something filed, the proof would be if they audit right? which at that time im sure I will have everyhting finished if that happened.
Expert:  Law Educator, Esq. replied 4 years ago.
1) When you enlist one of these attorneys that specializes in corporate tax, as I said almost every one will handle the entire matter for you including filing the back tax forms and getting everything up to speed. You may pay a small amount more, maybe $50-$100 per hour more than a CPA to clear up the matter, but in the long run the attorney has more leverage to assist in fighting for reductions of fees and penalties and if there are major problems with the state's calculations the attorney can pursue them through the appeals process (which the straight up CPA cannot do and that means spending more money for an attorney to get up to speed on what the CPA did to date). In the long run on these matters it is usually worth the extra expense of using the corporate tax attorney from the beginning.

2) You eventually will have to get all of your corporate tax filings up to date, but for the purposes of the sales tax bill BOE is claiming you can put together your sales receipts to prove you did not make the sales BOE is claiming to prove you do not owe them what they state is owed. At this point, since they have made an assessment you are going to have to submit all of your proof of sales to them to get them to recalculate their assessment.
Customer: replied 4 years ago.
once all the data is in quickbooks and ready, I would think it would be more cost effective to have a CPA do the filings, minutes and everything else that a corp needs done (im ignorant about it all and don't know how it works) and once the CPA does there thing with the filings, then the extra expense of the attorney to have them finish it off with the BOE, would this be good or are you saying that an attorney to do the filing is still much better. I just have to be sure I can afford all this. I called some places yesterday and they says aound $4,000 to file everything. What range would you guess? I don;t want to be too cheap and don't know if I can afford much more than that.
Expert:  Law Educator, Esq. replied 4 years ago.
All I can tell you is like I tell clients that come into my office daily who have acted on things in a way they thought would be more cost effective and now need an attorney, the old adage "you can pay now or pay more later" applies. You can use the CPA who can put everything together and present it to BOE and begin negotiations to try to reduce your tax liability. If BOE agrees, great you saved a few hundred dollars. If BOE does not agree with the CPA's assessment, then you need an attorney to pursue your appeal and pretty much every attorney I know will charge a higher rate because they were not involved from the beginning and now have to play catch up and possibly have to straighten out things the CPA did to help strengthen your case. This is why there are so many Attorney/CPA's out there, they specialize in these matters and can do both for you.

It is not really going to be cheap to try to get you out of this mess, I would estimate that $3000-$5000 would be a good ballpark figure and that could go up if BOE wants to fight over this. Even a good CPA for something like this (cleaning up another CPA's mess) will charge you in the $3000 range. But you have to evaluate how much BOE claims you owe against how much an attorney/CPA can save you in not just the taxes but penalties and fees against the cost of paying the fees of the attorney/CPA or just a CPA. Again, you are still going to need a upper end CPA to straighten this out, not some regular fill out the tax forms type CPA but one with experience fighting with BOE, and they are going to cost more than a regular CPA, so in all likelihood spending the extra $1000-$2000 for the added experience may likely be worth it in the long run if any problems or issues arise that will require going to court (and many BOE cases end up in court because of the CA corporate tax issues and the fact that several of the circuit appeals courts in CA have stated the corporate tax structure is unconstitutional but the State Supreme Court has yet to rule on it, so more businesses are now suing over their tax bills).
Customer: replied 4 years ago.
thanks, XXXXX XXXXX your right and thats what I will do, I just want to be sure to have someone I can trust. Can you tell me what are good and bad things to look for and watch out for in picking an Attorney/CPA and do you have any recomendation?

Expert:  Law Educator, Esq. replied 4 years ago.
You need to ask them about their experience with BOE. Ask them about their success with BOE and if they have had to go to trial against them and what the outcomes were. Unfortunately, the terms of this site prohibit us from making referrals, the best we can do is suggest the same site used by other attorneys, http://www.martindale.com
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 89586
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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