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Is there a way to get out of paying back taxes on a CA S Corp that never made any money? I wasn't aware of the min tax rate.

Simi Valley, CA |

I incorporated my business as a CA S Corp in 2006 and filed a 0 tax return each year stating that the business was non operational/not making money. In 2012 I received a noticed that my corp was suspended, I called FTB and they said that I never filed a return and owed 6 years in minimum tax plus penalty and interest totaling $6k. My business manager never told me about this minimum tax.

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Attorney answers 2

Posted

There is no way "to get out of paying back taxes on a CA S Corp." The corp. is required by law to pay the minimum tax. You personally are not liable to pay it. The corp will remain suspended until it is paid.

Good luck!
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
Licensed in the United States Tax Court
www.culvercitytaxandbusinesslaw.com
www.corporateattorney.com
www.worlclasslawyers.com
Call: 323-292-4116 or 562-505-1004

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. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is philsmithjr@worldclasslawyers.com.

Asker

Posted

I want revive the corporation but can't afford the back taxes, can I start a new corp llc using a similar name?

Asker

Posted

I want revive the corporation but can't afford the back taxes, can I start a new corp llc using a similar name?

Asker

Posted

I want revive the corporation but can't afford the back taxes, can I start a new corp llc using a similar name?

Asker

Posted

I want revive the corporation but can't afford the back taxes, can I start a new corp llc using a similar name?

Phillip Monroe Smith

Phillip Monroe Smith

Posted

Using a similar name may be possible, and can be tricky because the Secretary of State normally will not permit the uses of a similar name. It really depends on the name and what derivative of the name you choose. There is a special procedure for using the same name of anothe entity that the SOS will allow - only if approved under certain circumstances. I have never seen this special procedure work with a suspended corp. because you are attempting to circumvent a problem that you created. Let's discuss! Good luck! Phillip M. Smith Jr. Los Angeles Tax & Business Attorney Licensed in the United States Tax Court www.culvercitytaxandbusinesslaw.com www.corporateattorney.com www.worlclasslawyers.com Call: 323-292-4116 or 562-505-1004

Posted

Nope. The corporation is liable for the minimum franchise taxes even if it is non operational or not profitable. The corporation has the liability to pay (and file tax returns), not you personally.

You can just let the corporation remain suspended if you do not intend to revive it.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.

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