The IRS said some taxes weren't paid. One of my partners handled that area. They IRS garnished my personal pay (the partnership became a sole LLC -conveniently by the person in charge of taxes). Is this supposed to happen?
There really needs to be more details here to fully answer your question. What type of tax is owed and what is meant by "sole LLC?"
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The IRS can collect it all from one partner or member as it is a "joint and several" liability. Whether it is now an LLC or a partnership, generally a partner who pays a debt of the entity is entitled to pro rata contribution from the other members or partners as the case may be. So you may have to sue your fellow venturers if they won’t voluntarily contribute. You may have to consult tax counsel to get it straightened out.
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Some terms are at war with each other.
sole LLC is not equal to a partnership.
"pay" is not equal to partnership distribution and indicates employment or forced/designated payment.
You need a tax lawyer and fast. The wobbly facts may indicate fraud / theft. Partners are not supposed to get "personal pay" unless there is an unusual arrangement.
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.
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