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J.Hazelbaker
J.Hazelbaker, Attorney
Category: Business Law
Satisfied Customers: 4385
Experience:  Experienced and trained in the area of business law.
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I was a partner in a LLC business from Nov 2004 until Dec 2009

Resolved Question:

I was a partner in a LLC business from Nov 2004 until Dec 2009 when I gave up my percentage of the company. The signed (Oct 2010) partnership exit agreement states "remaining partners assumes legal responsibilities for all financial profits made or liabilities owed, past, present of future.". The IRS has preformed a audit on the company for the year 2007 and the result is the the company (partners) owe additional tax. The notice I received dated Feb 8, 2012 states that my portion of the additional tax due from the audit is 13,225.75. The question I have is the tax burden mine to pay or is this something for the remaining partners to take care of because of the exit agreement.
Submitted: 4 years ago.
Category: Business Law
Expert:  J.Hazelbaker replied 4 years ago.

J.Hazelbaker :

Hello.

J.Hazelbaker :

Thank you for using JustAnswer.

J.Hazelbaker :

Ultimately, the liability is the responsibility of the remaining partners.

J.Hazelbaker :

However, if they do not voluntarily comply with the exit agreement, you will have to sue them to force payment.

J.Hazelbaker :

The IRS, however, is not bound by the partnership agreement. They can pursue you individually until and unless the assessment is satisfied as they were not a party to the agreement. The exit agreement does not shift your liability for taxes during that time, but forces the remaining partners to "indemnify" you.

J.Hazelbaker :

If they fail to meet that responsibility, then your recourse is to sue them to enforce the exit agreement and get the matter resolved.

J.Hazelbaker :

You can also ask the court to force the remaining partners to pay your court costs and attorney fees.

J.Hazelbaker :

Please let me know what follow-up questions you have. If my above responses have been helpful, please click Accept so that I get credit for the time/effort. You may always restart the thread and ask follow-up questions at any time by clicking the “Reply” button at the bottom of the question/answer thread. You can access this thread later in your profile under the “My Questions” tab.

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