I am removing my name as Vice President of a business partnership. Will I still be held accountable for previous liabilities?

I am not your attorney and this response is merely informational and not legal advice. Please consult with an attorney in your state.

Answer: Yes. Your IRS Trust Fund Liability (941) will run for all periods that you were a controlling person during which some or all of the monies were not remitted to the IRS. If you used the money that's extremely bad. If you were just an officer you are going to have make sure the 941 payments were made or they will become your personal liability.

I would suggest you contact a tax lawyer or cpa immediately if you have any concern that you have this potential liability.

If you need a contact I have several.

Good luck.

Your question is whether the vice president of a business can be held liable for government obligations such as taxes (federal, state, unemployment, etc.) after leaving his or her position. The short answer is 'yes, if ...' and the long answer 'no, but ..." Here is what I mean.

First, you characterize yourself as the vice president of a partnership. Being an officer (ie vice president) is very different from being a partner. If you are both then you may well be liable as a partner - but it is unlikely you would be liable as an officer. The answer depends on whether you were a "controlling person" as that term is defined by the IRS, the IL Dept. of Revenue, the IL Dept. of Employment Security, etc.

Second, you say that you are removing your own name as vice president. Does that mean you are resigning? Or that you have the power to remove yourself at will? Either way, if others will remain involved then it would be a good idea to negotiate an indemnification to cover just this kind of situation.

Finally, people use the term "partner" and "partnership" to mean a lot of things. Is this really a partnership in the legal sense or is it something else like a limited partnership or limited liability company. The answer can make all the difference.

We've only scratched the surface of your question here, but a competent attorney should be able to explore these and other issues, and help you arrive at a fair arrangement. I hope this information was helpful. Feel free to call if we can be of further assistance.