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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12443
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I received a letter from Los Angeles city collection agency,

Customer Question

I received a letter from Los Angeles city collection agency, what do I do? There is almost $12k debt, they penilized me not to have a business. However, I was employed by fitness company as independent contractor and I don't work there anymore. The company doesn't exist anymore. My cpa said that I need to go to city and apply for business license and pay debts. But again, I've never have a business and I work at front desk. Plz navigate me what do I do.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi. My name's Lane. I can help you here.


First, if you are in independent contractor (getting a 1099 rather than a W-2) you are considered (for tax purpopses anyway) a business. You file a schedule C to report the inccome BUT can deduct business expenses befor coming down to a number that is your profit ... it's that "profit from your business" that's taxable.


HOWEVER, if you go to city and excplain that you were an agent FOR the company, and that you did not sell or do anything as a business opwner yourself, you completely represented this other company, it's very possible that you do not need a separate business license of your own.


I would go to the city and have them look up the compnay you worked for, to document that it was THIS company that had the business license and that you were just a contractor working the front desk.


I'll look at the code but I don't believe that, again becasue youwere an agent for the business, that you would need your own business license, and be liable, when the compnay was already paying city tax and licensing costs on that revenue.


Bear with me for a few

Customer: replied 1 year ago.
Ok.:I will. Yet, letter said that there will put me an court in 10days and put a lien on my account. I know that probably my credit report already suffered from it but im scared that if they released supene I won't be able to access my money from the bank. What time frame do I have to handle it?
Expert:  Lane replied 1 year ago.

I would go down as quickly as possible.


I was just looking at the code and even ir you WERE required as an independent contractor, there's a small business exemption


LAMC Section 21.29, Subsection (a) has been amended to provide an increase in the small business exemption threshold. On July 1, 2005, the small business exemption threshold increased from $5,000 to $50,000 and on July 1, 2006, it increased from $50,000 to $100,000

Customer: replied 1 year ago.
Ok, thank you. I'm satisfied with answers. You guys are great
Expert:  Lane replied 1 year ago.

You're very welcome ... Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …is thanks enough!

That’s how we’re credited for the work here


Thank you,