Business Debt/Florida LLC Debt

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Expert: - 11/2/2010


Question
We have a disputed Bill with our accountant for our LLC tax returns.  The accountant is threatening to take the bill to collections against each member personally.  Is this legal since no one personally guaranteed payment to the accountant.  

Answer
Brian,
It is true that LLC’s and corporations are organized to protect your personal assets from creditors as a matter of law.  So while I do not believe that it is legal as you have presented it, you still need to proceed with caution.  The reason is that in order to prepare the returns he or she needed the address and social security numbers for each member in order to prepare the schedule K-1 (form 1065).  In addition, while no personal guarantee was signed, if there is a contract for their services, there could be language in the contract that includes a personal guarantee.  Even if there was no written contract, if there are signs placed in the business that indicates they will pursue personally, that could be sufficient notice that such an action can be taken.

Be aware that the IRS holds business owners personally liable for payroll taxes, and this is another method that the accountant may have at their disposal.  They may choose to “tip off” the IRS to examine your returns, indicating that you had disagreed with their findings.

I do not know of any peculiarities in Florida law but there could be some that you might need to know about.

Best of luck,
Michael

P.S.  I apologize for the delay, I was at the doctor most of yesterday.

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Michael Fay

Expertise

My focus and specialty is in credit, so that the risk of the debt itself is minimized. This means understanding it, predicting it, and helping to correct it. Having worked in contracts & credit, I have also worked with all of the related documents such as Guarantees (personal and corporate), and Security Agreements (aka UCC’s or “liens” – but I caution you in using those interchangeably).

Experience

I have a broad background with more than 15 years in the credit industry. Ten years with Dun and Bradstreet, first as a field reporter creating reports, then in customer service, finally I served as the credit manager designing risk models for many national and international customers through D&B’s Outsourcing function. Five years with another publicly traded firm where I created the credit department and then served as credit manager for North America. At both companies we used both business and consumer data. You probably know that both business and personal credit have scores; what you might not know is how many different types of scores there are. I am familiar with and have used many different scores in each. Also be aware that each credit type (business & personal) is unique with different processes and different time frames. I have served on the board of directors for companies in many states and still serve in some capacity in a few. I contribute to credit publications and work with the non-profit arm of the SBA called SCORE.

Organizations
ACA International * NACM * Credit Risk Managers * SCORE (SBA)- Counselors to America’s Small Business * Payment Card Industry Network * PaymentSource.com * D&B Alumni * Psi Chi, National Honor Society for Psychologists

Education/Credentials
BIS in Business and Psychology, University of Minnesota * MBA is still in progress (on-line)

Awards and Honors
State of Colorado - State finals in Accounting and Advanced Accounting. * D&B Leadership Winner (3 times) * D&B Leadership Finalist (3 times) *

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