Los Angeles, CA asked in Tax Law and Collections for California

Q: I cancelled an inactive LLC but still have back-tax/penalty notices coming in. What can happen/what is my best recourse?

The notices were going to a location where I do not live (went to my ex-partner's parents house), and I just got my hands on the notices that say we owe thousands. This LLC was only active for a few years, as a production-company shooting a series, and unfortunately, the entity wasn't cancelled in a timely way. According to the FTB, we owe 800/per year for the four years we didn't pay (thinking we were closed down), plus TONS of major penalties, interest, fees. I wish we didn't have to pay any since the LLC had no assets at the time, and was conducting no business, but I'd be ok paying the tax alone and not these fees! I didn't receive the communications myself, so I'm particularly frustrated. the LLC has been cancelled, it is technically officially defunct, but the interest on our back-taxes keeps accruing. What should I do?

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2 Lawyer Answers
David S. Greenberg
David S. Greenberg
PREMIUM
Answered
  • Tax Law Lawyer
  • San Diego, CA
  • Licensed in California

A: It is quite possible that you will be insulated from personal liability for the tax obligations of the LLC.

If you would like to discuss this in detail, please call my office to schedule a free initial consultation.

D. Mathew Blackburn
D. Mathew Blackburn
Answered
  • Tax Law Lawyer
  • Englewood, CO

A: You should call and tell them what happened and ask if that constitutes "reasonable cause". They're going to ask you to fill out a FTB 2924. https://www.ftb.ca.gov/forms/misc/2924.pdf

Ideally once you explain to them that the company was dissolved prior and you just goofed the administrative details they'll likely give you a break.

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