Kennesaw, GA asked in Tax Law for Georgia

Q: If a person owes personal State or Federal Income taxes in Georgia can there LLC Business checking acct be garnished?

Can the IRS or Ga Dept Revenue garnish LLC Business checking account for personal tax debt owed?

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James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: If a person owes personal state or federal income taxes in Georgia, their LLC's business checking account may be subject to garnishment or levy by the Georgia Department of Revenue or the IRS, depending on the circumstances.

Generally, the LLC's bank account can be subject to levy or garnishment if the LLC is considered a disregarded entity for tax purposes or a pass-through entity, such as a partnership or S corporation. This means that the LLC's income and expenses pass through to the owner's personal tax return, and any tax liability is attributed to the owner.

If the owner owes personal income tax debt, the Georgia Department of Revenue or the IRS may levy or garnish the LLC's business checking account to collect the debt. However, if the LLC is taxed as a separate entity, such as a C corporation, the LLC's bank account may not be subject to levy or garnishment for the owner's personal tax debt.

It is important to note that garnishment or levy actions by the Georgia Department of Revenue or the IRS must follow specific legal procedures and may be subject to certain exemptions and protections. If you are concerned about the potential garnishment of your LLC's business checking account, you may want to consult with an experienced tax attorney who can provide guidance on your specific situation and help you understand your legal options.

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