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.

Asked over 2 years ago - 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.

Attorney answers (2)

  1. Frank Wei-Hong Chen

    Contributor Level 20

    5

    Lawyers agree

    2

    Answered . 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... more
  2. Phillip Monroe Smith

    Contributor Level 18

    4

    Lawyers agree

    2

    Answered . 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... more

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