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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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Can a company be sold that has irs tax debt without the irs

Customer Question

can a company be sold that has irs tax debt without the irs debt being transferred to the new owner
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Hi and welcome to our site!Yes - that is possible - if the company is a separated business entity - it may be sold - and the tax debt will still be associated with that business entity.
Customer: replied 1 year ago.
So the company can be sold and leave the text debt with the previous owner?? This business is currently in irs trouble... And new owners want it but not the irs payroll debt it has
Expert:  Lev replied 1 year ago.
If that tax debt is associated with THAT business entity - the tax debt may not be removed - and will still be associated with that business entity.The business entity - not the owner will be responsible for that tax debt.If the buyer doesn't want to deal with that tax debt - the sale should be structured as an asset sale - not as the sale of the corporation.In this case - the seller still will own the entity - but not business assets.
Customer: replied 1 year ago.
this is a mental health company many of the assets are clients and the ability to bill the company in charge of the area through medicade... there is a levy on it now if it gets removed then is it possible to buy that and assets and remain at the original location it is a rental location
Expert:  Lev replied 1 year ago.
A client list is listed among other assets - that would be section 197 intangible asset - and it may be sold.If the levy on company's assets - you would need agree that proceeds from the sale will be levied - and taken toward tax liability.If that location is rental - the rental contract will be terminated and the new owner would have to sign a new rental agreement with the landlord - that is not a part of company assets unless .the buyer would take over the existing contract.Contract with Medicaid - is a separate issue - the new owner would need a new contract if that is asset sale.If that is a stock sale - means - you are selling the corporation as a whole - the tax debt will remain with that corporation.

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