My sister married a guy who declared bankruptcy a couple times in the past. When they married he started a new business and put the business under her social security number, because of his bad credit. He ended up spending about $20k of sales taxes that should have gone to the government. They are now probably going to go through a divorce, and my sister is going to have to declare bankruptcy now. My sister had nothing to do with this business, but with the new bankruptcy rules she is going to have to come up with the $20k. Does anyone know if my sister is totally out of luck or is her husband going to have to foot any of the bill?
2006-12-16 07:24:32 · 4 answers · asked by wjordanfam 1 in Business & Finance ➔ Taxes ➔ United States
I am in Utah. thanks.
2006-12-16 07:40:46 · update #1
To answer your specific question, you need to say what state it is.
She should, in any case, engage her own accountant. There are issues regarding the business and her personal tax situation which need careful handling. If the business has a CPA just now, seeking advice there would create a conflict of interest. i recommend finding a new CPA for her personal affairs and then telling the business' CPA immediately. That way, he does not have to find out about it from a fellow CPA calling up asking for handover information.
2006-12-16 07:31:37 · answer #1 · answered by skip 6 · 1⤊ 0⤋
First of all, you sister needs to see a local bankruptcy attorney and not rely on the advice received in this forum. The $20,000 may or may not be dischargeable depending on how the law of her state characterizes the sales tax. She also needs to run this by her divorce attorney. There may be a procedure to to allocate this debt to him because he ran the business or require him to reimburse her if has to come up with the money.
2006-12-18 11:37:52 · answer #2 · answered by Carl 7 · 0⤊ 1⤋
Unfortunately, since the business is in her name, she is liable. I'm assuming that if he used her SSN, he had to have put the business in her name as well. Even though he was the dummy, she shouldn't have allowed him to put it in her name. Now, she is liable to your state for the sales tax. And as far as I know, they aren't forgiving of that sales tax. She needs to check with a lawyer, but I don't think that you can declare bankruptcy on taxes owed to the federal or state governments.
2006-12-17 02:54:08 · answer #3 · answered by Fool in the Rain 6 · 0⤊ 0⤋
This is more of a bankruptcy question than a tax question.
If he used her social security number without her consent and identified it as HIS SSN, that might be relevant.
An attorney who specializes in bankruptcy cases should be consulted.
2006-12-16 07:30:29 · answer #4 · answered by Anonymous · 1⤊ 0⤋