Business Taxes

[RunningMan]

I have a corporation that is no longer doing business. The corporation owes money to the EDD. I named them in my personal bankruptcy, but continued to get statements from them demanding payment. So I called them to ask why. I was told they have not held a 1735 hearing and found me personally liable for the taxes yet, therefore they would not be filing a claim against my personal bankruptcy. They may hold a hearing at a later date and find me responsilble. The agent mentioned that I can file a claim for them. I sent an email to my attorney explaining the situation, but he hasn't let me know what he wants to do yet.

If I don't file the claim and they are named in my bankruptcy, can they hold me liable at a later time? Barring winning the lotto or a huge promotion, I probably won't be paying back 100% into my plan so I don't really see the downside to filing a claim for them.

I have a similar issue with the IRS and the corporation. I keep getting statements from them for the payment plan I had with them before filing for bankruptcy. They have already found me personally responsible for at least the trust fund portion of the tax debt. I called them also. The agent told me they probably received the notice for my social security number and did not associate it with the EIN for the business. I find this hard to believe after what I have been through with them. We need to send another letter to a special address asking them to associate the bankruptcy with the EIN, she couldn't do it over the phone. She did say my payment plan was still in force even though I haven't made the last two payments on it. I am worried they may start collection efforts again even though I should be protected by the stay.

[car67]

Morning Running Man I understand your position. I am in the same boat cept a few corners ahead of you in the maze. If the corp is not doing business and is closed with no assets or active bank then your not liable for any debt personally since you filed a bankruptcy. Yes the trust fund is payroll taxes 941 and your on the hook for those and not dischargerable. As for any corp tax or state related to company profits or other wise your not on the hook personally. You can tell the collector in a final statement that the corp is closed, its a dead fish and if they wanna sue a closed corp and find there is nothing to lein or garnish as the bank is closed go right ahead as its a dead issue.........

[RunningMan]

Thanks car67. The corp is suspended because I didn't pay the corporation fees last year, so I can't dissolve it until those are paid. Those would be paid to the California Franchise Tax Board and I named them in the bankruptcy (but haven't called them yet). There is a bank account for the corporation with about $100 in it. I haven't gotten around to closing it yet. The EDD taxes have a trust fund portion like the IRS since they are payroll witholding for state taxes. According to the person I spoke to, they need to hold a 1735 hearing to find me personally liable, but haven't done so yet. I am worried they could do that in the future and come after me for it if I don't deal with it now.

[car67]

Well if it was me...... I would let the corp close it self. The state will dissolve once the fees are not paid. I would also close the bank and consider it a done deal. As for the potential liability for the state payroll tax in Ca I would simply take the worse case scenario and lets say you owe 50,000 in payroll tax..... Then I would toss it in the plan as a creditor... If they fail to make a claim then I am willing to bet your pretty safe..... Keep us posted....

[RunningMan]

Thanks again. I called my attorney's office and found out he is on vacation until Monday. I am sure I will hear from him when he gets back. The state taxes are just for the last month before I closed the business. I thought everything was paid, but my accountant didn't file the final paperwork, so they kept sending me bills for estimated taxes for 2009 and 2010 when I had no payroll. It got up to $14,000. I straightened it out right before I filed the bankruptcy, but they still show I owe about $3000 including interest and penalties. They suspended the corporation for unpaid fees, but it still accrues new fees every year while it is suspended. I can't dissolve it unless I pay the fees and petition to get it unsuspended. The trustee agreed to pay those fees first at the 341 hearing so that I can dissolve it, although afterwards my attorney said he couldn't show it to be paid any sooner than the other priority creditors in the plan.