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Thank you for your question. Please permit me to assist you with your concerns.That is indeed a can a worms. If you admit that he was an employee, he can arguably refile for unemployment and attempt to receive it. This is something you may want to explain to the new owners, that if they took over this corporation, they may end up being liable for his unemployment benefits even if he was not an employee nor has he never worked a day for them directly. If the tax bill is purely based on 1099 work and is not opening p his claim into employment, it would indeed be cheaper to pay it and forget it, as that would not claim that he was an employee. The fact that you no longer own the company would mean that IRS would go after the new owners since they purchased the company along with all assets and debts. As for the tax attorney, I am afraid that is accurate as well--corporations are considered to be separate legal entities. Doing legal services for them is forbidden other than for attorneys since it would be potentially 'unauthorized practice of law'. While you can self-represent, you cannot represent a company. I do not see you being liable, however, the new entity is liable once they made the purchase and bought the assets and the debt.Good luck.
im pretty sure the tax bill is for tax's that should of been paid as an employee, he never paid any tax's on the income he earned, which was small, 3700 dollars.
either way, if im not liable any longer, im good, the new owners have taken it upon themselves to address this against my advice, I just want to be sure im not on the hook
Gregg,Thank you for your follow-up. To put it in perspective, the company is on the hook, not you. When they purchased the business, the got all of the company's assets AND debts and obligations. This is an obligation the company needs to pursue. If they are wanting you to pay it, THEY will deal with the fallout and the consequences from the IRS, as it would no longer be your liability or your responsibility.Good luck.
even if they changed the name of the corp, after they bought the business?
Gregg,Thank you for your follow-up. If they are still keeping the old EIN, then it is still legally the same business, even if the name has changed. What governs is the EIN (essentially the SSN of the business), and that is what truly follows the business around from location to location and is utilized for identification and tax reporting purposes.Good luck.
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