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What is the statue of limitation for sales tax collections debt in Wisconsin? Business is in IL and closed 4/09 but $ still owed

Deerfield, IL |

The business closed with an ABC and no one but secured lenders were paid. An embezzlement of $3 million was the cause. Sales tax in 15 was collected but no remitted, the funds were stolen by VP, not owner. The state occasionally sends bills with the owners name and then the company with the amount owed on a "statement of account". 1/2 the months are estimates since no filing was done by the staff. NO docs have come stating personal liability. What is the state of limitations on collections or personal assesment in Wisconsin?

Attorney Answers 3


The ABC (assignment for the benefit of creditors) is a rather sophisticated way of selling the business. Your company must have had good counsel winding up the company. The ABC is probably one of the best ways to minimize the liabilities for sales tax purposes if done properly and states rarely act fast enough to secure their interests in the proceedings.

The criminal side of sales tax theft is still a concern. If you were not involved with the sales tax side of the business and didn't supervise anyone who was handling the sales taxes, then you should be somewhat insulated. The ABC can also help with the criminal defense in a sales tax theft investigation, but it is not a complete shield.

Sorry that I don't have Wisconsin specific information for you. But generally there is a 3 year statute of limitations for the state to get an assessment. If the assessment is made in time, then the state has lien rights on the company assets for many years (20 years in Florida). The statute of limitations is often longer on the criminal side (5 years in Florida).

I hope this helps!

James Sutton, CPA, Esq.

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I am not licensed in Wisconsin. However, most states including Illinois have a very long statute of limitations on tax debt owed to them, or no statute of limitations at all on government debt. They will generally go after the officers of the company or the owner if taxes were not paid for sales tax. This is a tax question and likely should be posted in that area. As far as bankruptcy is concerned sales taxes are non dischargeable in Chapter 7.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.

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As stated by Mr. Wagerman, tax collections, in many states, have very long statutes of limitation, if any. The state may pursue the owners or officers of the enterprise, until response. Your most prudent course of action would be to consult with a WI attorney familiar with this area of law.

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