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Is there a statue of limitations on unpaid business sales taxes in Michigan?

Waterford, MI |

I used to own a clothing store (S-corporation) in 2003 and sold it in September of 2003. According to state records, the filing to remove my name as an agent of the business was filed in 2004. Last year i started getting letters from State of Michigan about some unpaid sales taxes for 2003. Unfortunately I lost all documentation that pertains to me owning that business and the sale of it. Am I liable for these unpaid taxes? Is there a statue of limitations? Do I need to hire an attorney, and what could be the attorney fees (approximately) dealing with this situation?

Attorney Answers 4

Posted

You need to consider an appeal of the assessment against you. Liability for corporate taxes is imposed under Michigan law on officers. It sounds like you resigned as resident agent. A resident agent, per se, is not liable. Did you previouslly resign as officer? You probably ceased to be an officer upon sale of the shares,

This answer is for discussion purposes only and will not be considered legal advice. Further, a court could potentially decide the question contrary to my answer.

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Posted

The statute appears to be six years. See here, for information on the collection process, as well as what to do, in the event that you dispute the tax: http://www.michigan.gov/treasury/0,1607,7-121-1755-156496--,00.html

James Frederick

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

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1 comment

Thomas R. Morris

Thomas R. Morris

Posted

It is six years, but if the obligation is reduced to a judgment, the statute of limitations begins to run again and is longer.

Posted

I would need the details but the statute should have run unless there is something you have not mentioned.
Your fees will be determined on the time and expenses spent on your behalf, if it is simple, perhaps well under $1000, if complex multiples of that. Anyone willing to quote a fees on your present facts is not smart enough to represent you well.

To the PROSPECTIVE client, please call myself or another attorney for your choice with more detaiils and an appointment. My PRELIMINARY answer to your question(s) is for general purposes and based upon what little information you have conveyed. It is based on such limited information that the general answer should never be relied as a reason for your action or inaction. My response does NOT establish an attorney-client relationship and such may only be established by mutual agreement, and the signing of a written retainer agreement, which will generally require payment for our services, as this is what we do for a living and, just like you, we must get paid for our work.. .

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Posted

If I may take a stab in the dark here (an educated stab), then I would guess that you did not file a final sales tax return for the company. When you don't file a final sales tax return, the state assumes your business is still running at that you are simply not remitted the tax. Most states will estimate what you owe and go on the assumption that you do owe the tax until it is proven otherwise. You might be able to resolve this by simply calling the state and finding out specifically to what periods the tax relates. You might be able to simply file a very late final return that reflects zero taxes due, pay a late filing penalty, and be done with it.

Note - the statute of limitations may be six years - but the statute of limitations does not begin to tick if you don't file a return.

I hope this helps and good luck!

James Sutton, CPA, Esq.
www.FloridaSalesTax.com

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