Unfortunately, Social Security wages doesn't necessarily have to match and the computer program isn't going to catch that discrepancy. Also, you may pay a small penalty, but most of the additional taxes owed is due to the under reporting of income. Regardless if TurboTax caught the mistake, tax would still be owed to the government. TurboTax guarantees accuracy based on the data input into the return, but they won't pay taxes that were under reported.
This is a situation where the LLC Agreement rules the day. Refer to the paragraph regarding removal, disassociation, dissolution, etc. Then, bring it to an attorney to assist with the LLC dissolution.
My firm has dealt with these types of matters many times before, and it can get messy, so it is always advisable to have an attorney review the LLC agreement and proceed from there.
The general principals of agency apply here. If the 3rd party was under the impression that the worker had authority to bind the business, the business will generally still be bound to the contract. If the 3rd party knew, or had reason to believe, that no such authority existed, then your business would not be of the hook.
Nonetheless, you could still pursue the ex-worker for recovery of the bill paid to the 3rd party.
I agree with my colleague on this one. You have a fact specific, complex business structure that cannot be answered on Avvo. If you need a local attorney to analyze your situation and help setting up the businesses, please check out my website.
I have experience with business start-up, so feel free to contact me if you wish to pursue legal assistance.
Sean R. Kennedy, J.D., LL.M
I agree with my colleague here. There are too many things that need to be examined to give a proper answer. The partnership agreement, if any, needs to be carefully reviewed. Their could also be numerous tort and contractual actions that you potentially could pursue. However, there may be similar actions that you may be vulnerable to at this time. You should contact an attorney to flush out the pertinent facts of your situation.
You will want to enter into a separate property agreement outlining what property and debt will be deemed to be that of the individual and not the marital community.
Furthermore, look into Injured Spouse Form 8379. This will protect you from the IRS taking your refund checks to satisfy his liability. The separate property agreement will go to support this treatment. Washington state is a community property state, so issue like this are a little tougher to maneuver around. However, it isn't...
I would need a little more information to know exactly what type of business form you operate and which licenses you have with the state; however, you probably can find the information you are looking for on the WA Secretary of State website. If you have any sort of partnership agreement, you may need an attorney to assure that the business relationship is dissolved properly.
I preface this answer with the disclaimer I am not a divorce attorney. But I will answer from a business/tax attorney standpoint. If this were a standard business transaction, your basis in the business will have been increased as income was recognized and decreased as disbursements were made.
For example, if you invested $3000 initially, and paid taxes on $10,000 over the years without distributions, your basis would be $13,000. Say you then sold the business for $10,000. You would...