Have a Tax Question? Ask a Tax Expert
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?
Well, it is a big difference if it is single member LLC or Scorp.
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.
So your fiancee and his father run the business together as partners?
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.