I don't ever want this to come back to haunt me with even larger penalties in the future. I need to know if its worth trying to resolve the penalties or walk away. The business has no cashflow or reserves.
The $800 LLC minimum tax is not a personal liability. Even the FTB admits on its website that "In general, all the owners (members) are shielded from individual liability for debts and obligations of the LLC."
So, the FTB will send you countless notices that the LLC must pay the $800 LLC minimum tax, but in fact you are not personally liable for same and can ignore the notices. However, there are some exceptions but I do not think any of them apply based on the facts provided. To make sure, see a state and local tax attorney for advice. Good luck!
In addition to Mr. Halverston's excellent advice, you could consider filing a complaint with the Board that regulates the credentials of the CPA you say failed to give you proper service
LEGAL DISCLAIMER: Please note that this comment does not constitute legal advice nor has an attorney-client relationship been created.The law may vary depending on the state in which you reside or the jurisdiction where the activity took place. This comment is intended only to give some direction in which to seek further guidance. If you think my post was helpful, please check the thumbs up tab located below.
There are multiple considerations of whether to properly dissolve an LLC. The Franchise Tax Board will continue to charge $800 a year with interest and penalties. You're going to get letters in the mail and probably phone calls. This is stressing to many people. You'll also get letters from the Secretary of State for the Statement of Information filing requirements. Besides the FTB and SOS costs, the LLC will eventually be suspended by the SOS. A suspended LLC has no right to defend itself in court. So if you have any potential risks of litigation for the LLC, then you'll want to keep it active or dissolve it.
It would be helpful to know what your CPA is planning on doing to help you recover from this mistake.
Before taking the step recommended by Ms. Berschler, I second the suggestion given by Mr. Kaufman to contact the CPA for the business and have him/her/the firm tender the matter to their malpractice carrier.
Also, check your credit reports to assure that the FTB has not filed a derogatory credit report against you. If it has, challenge it with the credit reporting agencies.
Disclaimer: This answer is provided as a courtesy. This response does not constitute legal advice, which requires an attorney-client relationship, and this response does not create an attorney-client relationship between us. It is impossible to properly evaluate a legal problem without a detailed consultation and a comprehensive review of all the facts, documents, and/or other materials involved. In addition, if you are in a state other than California (where I am admitted to practice), your state may have different laws. You therefore should not rely on this answer, but should consult with local counsel for definitive guidance.
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