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 Lane Your Own Question

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3739
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

Im purchasing all of the assets of a business owned by an

Resolved Question:

I'm purchasing all of the assets of a business owned by an LLC. The LLC bought this business in 2010 from another corporation.
In 2012 IRS has filed a lien for unpaid taxes against the corporation that sold the assets to the LLC.
Am I and my S Corp liable in this case?
Submitted: 9 months ago.
Category: Tax
Expert:  Lane replied 9 months ago.

Lane :

Hi,

Lane :

DO you know what tax year the lien regards ... Alien will typically be for a specific years' assessment

Customer:

Hello Lane

Customer:

Sure

Customer:

1120 for 07 and 09

Customer:

944 for 07,09,10

Customer:

and CIVP for 2005

Customer:

the date on assessment for all but the last one is in 2011

Customer:

July and August

Lane :

LIKELY not ... as (1) you paid consideration for those assets and this company has those proceeds with which to pay their lien, (2) Those assets were passed through sale before the assessment itself

Customer:

makes sense

Lane :

The lien DOES attach to what are called AFTER ACQUIRED assets of the company (or it's shareholders if involved) but this transaction took place before any assessment

Customer:

except for CIVP

Customer:

that was assessed on 11/08/2008

Customer:

is that legal fees?

Lane :

Ye,s but should this come up under the doctrine (followed by IRS in claim) is Substance over form ... assets received in exchange are attachable, but not the TRANSferred *exchanged) assets

Lane :

Civ = Civil
P = Proceedings

Lane :

Sounds like a previous Judgment, but not crimina;

Lane :

Do you think that the purchase reflected FMV, Fair Market Value (Your purchase)?

Lane :

Ahhh I see purchasing ... I'd be sure that no REASONABLE person would say you purchased for significantly less that FMV .. that might raise eyebrows

Customer:

It's about 1.25X EBIDTA

Customer:

plus inventory

Customer:

a bit on the low side, but the business is neglected

Customer:

80K for a business with 65K cash flow

Lane :

If they're solvent.. I'd get an attorney and have the sales contract have a warranty that if not delivered, you have claim ... but if that number is XXXXX in your business, your hands are clean ... again you're providing them with the liquidity that may be NEEDED to pay taxes

Customer:

even though it's not their taxes?

Customer:

Remember the taxes were for the corp that owned it initially

Lane :

Right ...

Customer:

then sold it to the entity I'm buying it from

Lane :

Just erring on the conservative side

Customer:

makes sense

Lane :

There's a concert called derivative title

Lane :

_first in time, first in lin

Lane :

line.... to collect

Lane :

But having it this far removed insulates you as well

Lane :

again you're not loaning them money nthat IRS may come and attach... this is a sale

Lane :

You could always have an attorney or bank give you a letter of clearance

Customer:

can you explain the letter of clearance please

Lane :

IF they GIFTED you the assets it could be very different ... that's why the sale needs to be reasonable in terms of the market for those assets

Lane :

Bank and some law firms, for a fee, will essentially research the situation and guarantee that he equipment is theirs to sell ... seen often in internal business exchanges

Customer:

I see

Lane :

not unlike title insurance for real property

Customer:

Is it reasonable to ask Seller's attorney for something like that?

Customer:

or have the Seller procure it on my behalf or possibly hold the amount owed in the escrow?

Lane :

I would ABSOLUTE plant that seed, lets them know that it's a concern

Lane :

Right, essentially hedging

Customer:

All right, I will do just that

Lane :

I will tell you this ... Ive seen IRS come after firms for alter ego (where the new company was esentially the same people or under the same control) but not for an arms length transaction for reasonable exchange,, not in my 25 years

Customer:

Thank you so much

Lane :

Yas, being vocal about your concerns may flush other issues, more disclosure etc. Unless you'e worried about losing the deal I don't thing it can hurt

Lane :

You're welcome

Customer:

I don't think I will lose the deal... the seller bought a business he has no interest in

Customer:

so he wants to sell it

Lane :

Then this may end up being leverage (to state the obvious)

Customer:

agreed

Lane :

By the way .... it's letter of credit (not letter of clearance)

Customer:

which is exactly what I will play for

Customer:

ultimately I'm transacting in good faith

Lane :

Right, be completely disclosed, expect the same

Customer:

thanks again

Customer:

Take care

Lane :

YW, good luck with it

Lane :

You too :)

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3739
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 3 other Tax Specialists are ready to help you
Expert:  Lane replied 9 months ago.

Thanks Alex,

Lane

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.