How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask CGCPA Your Own Question

CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience:  over 40 years experience in tax matters
50756543
Type Your Tax Question Here...
CGCPA is online now
A new question is answered every 9 seconds

We owe a large amount of sales tax to state of MI. My husbands

Customer Question

We owe a large amount of sales tax to state of MI. My husbands business has never made a profit and we have been audited 2 times by Irs. Probably cause we don't make any money. I am almost positive they will audit us again. We would like to sell the business. But who buys a business that doesn't make money. How can we resolve the sales tax issue. We don't have the money to pay $27,000. And we have to pay the employees as few as there are.
Submitted: 1 year ago.
Category: Tax
Expert:  CGCPA replied 1 year ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

Sales tax arrears are one of the most difficult things to put behind us. They originate from using money collected for the state (in this case sales tax) for the operation of the business. To begin getting this behind you the following path should be considered:

 

One of you should get a job outside the business. The funds earned at that employment (after tax withholdings) should be used to make payments to the tax arrears. After a few months of continuing good faith payments the state will be willing to work out a payment plan. During this time all sales taxes collected should be placed into a bank account annotated as existing for sales taxes. This will remove the money from business operations and, if carefully maintained and honored, will further serve as evidence to the state that you are trying to do the right thing. You may even then be able to make an offer in compromise with the state. An Offer in Compromise (OIC) enables you to settle the debt for a reduced value. This value will probably be for the original amount of tax due and will then save the added interest and penalties costs.

 

I know this will be a difficult thing since you will be stretched for time but it is the best way to move forward to get out of the hole you are in. Remember that sales taxes are also capable of being declared a personal responsibility and the state can come after you personally.

 

As to the IRS, if the audits resulted in no change to returns they will not likely be back for some time. If they did make changes and additional tax was due they very likely may be back. If you do not presently have professional representation I recommend that such be obtained. IT can be well worth the money spent.

Expert:  CGCPA replied 1 year ago.

Here is a short statement from Michigan about OIC's:

 

Collections/Delinquent Accounts
Will Treasury accept an Offer in Compromise?
Answer:
The Department of Treasury is prohibited by law from compromising the tax or principal balance on debts owed to the State of Michigan. Interest is considered to be a cost of doing business and is rarely waived. Penalty waivers are occasionally granted provided reasonable cause is established.

 

As you can see, the likelihood is that the best you can expect is a reduction of the penalty portion of the debt. That is why professional representation is needed to get you through this and is also why I recommended the other portions of my remarks.

 

Here is link to the state's web page on sales taxes:

 

http://www.michigan.gov/taxes/0,4676,7-238-43529---,00.html#What

 

CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience: over 40 years experience in tax matters
CGCPA and 4 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

I figured that would be the result. No they did
Find that we owed additional tax and everything
Turned out fine. Although we had to appeal
Their first decision. As I failed to mention there
Are 2 separate business and we each run one
With little or no pay (me not paid). Husband
Very little. Just enough to pay house bills.

Can we close the business and still try to negotiate
With payments. What do you recommend
Business are under desperate companies
So they are not linked together

Expert:  CGCPA replied 1 year ago.
You can negotiate a payment plan at any time, even after a business is closed. I would try to sell a business first. If it can be sold there will be more to help reduce the debt. With one business gone you may be able to make the other business profitable.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.