Accounting, Payroll & Pension Issues/Payroll liabilities and a new company

Advertisement

Expert: - 10/13/2009


Question
My husband's old company recently declared bankrupty. He has an IRS lien (payroll taxes) that cannot go in bankruptcy.  He has started a new LLC (partnership) and I am setting up his books.  The new company has been paying the old payroll tax lien.  I am not sure how to account for this expenditure on his new books since his new company is not liable.  Is it just a partner expense?  Thanks for your help!

Answer
If the old company or partner is paying it back than it would be set up as a loan to the other company.

If the old company or partner is not paying it back and it is becoming an expense of the new company than it should be set up as a tax debt payment.

Shirley

Accounting, Payroll & Pension Issues

All Answers

Answers by Expert:

Ask Experts

Volunteer

Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

©2012 About.com, a part of The New York Times Company. All rights reserved.