Is an IRS tax lien tied to my tax id number only? If I sold the business, would the new owner have to take my line as debt?

Asked about 4 years ago - Puyallup, WA

The new owner would have their own tax id number. There are no assets being transferred, and I will still operate business under the tax id number that has the lien attached to it.

Attorney answers (3)

  1. Steven J. Fromm

    Contributor Level 20

    1

    Lawyer agrees

    Answered . Your facts are confusing, so I will lay out some general ideas. If you sell the assets of your business to another party, they are only obtaining assets and they are not taking on any debt. In addition, any purchaser would want you to make various warranties and representations to protect them against such debt. If you sell the shares of stock of your business, the buyer takes the corporation as is and in fact the debts become his problem.
    So if you keep your corporation's shares and continue to operate such entity the lien would still be attached to the corporation.

    Hope this helps. If you think this post was helpful, please check the thumbs up (helpful) tab below and/or designate my answer as best answer. Thanks.
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  2. Henry Daniel Lively

    Contributor Level 20

    1

    Lawyer agrees

    Answered . If you did an asset sale of the business, which is what it sounds like from your facts, then the new owner would not inherit your tax lien. If you did a stock sale then it is possible for the lien to go with the sale of the business. However, if no assets were transferred it begs the question as to what you actually sold to this person.

    Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

  3. Ayuban Antonio Tomas

    Pro

    Contributor Level 20

    1

    Lawyer agrees

    Answered . I'm a bit confused as to what you are actually selling.

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. Answering this question does not create an attorney-client relationship or otherwise require further consultation.

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