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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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My fiance is a independent contractor, made it an LLC. His

Customer Question

My fiance is a independent contractor, made it an LLC. His father previously owned it a couple years back and did not file any taxes at all. Now the IRS is after my fiance. He wants me to take over the company. Is that even possible, if so will I be held liable?
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: He has a federal tax lien now.
Submitted: 6 months ago.
Category: Tax
Expert:  emc011075 replied 6 months ago.

Hi. My name is ***** ***** I will be happy to help you.

How is the company structured? Is it single member LLC? LLC with an election to be treated/taxed as scorp? Corporation?

Customer: replied 6 months ago.
It is a single member, just him.
Customer: replied 6 months ago.
I'm guessing it is an scorp? It is not a corporation.
Expert:  emc011075 replied 6 months ago.

Well, it is a big difference if it is single member LLC or Scorp.

Customer: replied 6 months ago.
I'm sorry. It is a single member LLC.
Customer: replied 6 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  emc011075 replied 6 months ago.

Ok. Single member LLC is treated as disregarded entity for tax purposes. It means that the owner and the company are the same person. It also means that single member LLC cannot be transferred from one person to another. Your husband needs to apply for a new EIN and operate it as his own business. His father debt is not his debt.

You can take over the company and run it as your own business, but you would need also request a new EIN. Or you can joint your fiancee and run it as partnership. In either case, the first step is to apply for a new EIN to stop the IRS going after your fiance or after your.

Customer: replied 6 months ago.
Before he turned it into a LLC the IRS slapped him with his fathers debt because it was his. He did not get paid this month because of this mess. He has federal tax lien as well. We just don't know what to do and I don't want to liable for the owed taxes.
Customer: replied 6 months ago.
Both of them has always had employees that worked for them, his dad just never paid those taxes.
Expert:  emc011075 replied 6 months ago.

So your fiancee and his father run the business together as partners?

Customer: replied 6 months ago.
Used to. He took over a couple years ago. The company is in my fiances name
Customer: replied 6 months ago.
When is father had the company he didn't pay any taxes, period. When my fiance took over he had no idea. An IRS lady knocked on the door and told him about how much was owed and now has a Federal Tax Lien. He just wants to put it in my name so we can keep getting paid every month. The IRS took every penny this month. I just dont know if that possible and if so, I dont want to liable for the large amount of taxes owed.
Customer: replied 6 months ago.
I've never owned a small business and I have CPA ready, I just do not know the steps to go and if this is even possible.
Expert:  emc011075 replied 6 months ago.

If a business is run as partnership, all partners are liable for for the entire partnership debt. If one of the partners leave the partnership ends. Your fiancee can continue running is as his sole proprietor business. Did your fiancee changed EIN when his father left the partnership? The IRS is going after your fiancee because of the partnership, not his current business. If he try to transfer the business to you to avoid tax collection, the IRS will take it.

You need to sit down with a tax specialist, file the missing tax returns and file installment agreement of offer in compromise. And you need to file final partnership return to let the IRS know that his current business is not the old partnership any more.

Expert:  emc011075 replied 6 months ago.

Any questions?