Tax Law (Questions About Taxes)/Ohio sales tax

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Question
My husband and I sold our small business corporation in 2006.  Unbeknown to us, the new owner was not paying his sales tax.  I was greeted at the front door with a mailman handing me 29 letters and my husband 29 letters from the state of Ohio sales tax division.  Because the new owner was not paying his sales tax, they went into the records and found our names and address and said that we owed the back sales tax.  We had nothing to do with the business once we handed over the keys.  We hired an attorney to do all the paperwork in the sale and thought everything was done properly.  I took all the bills to the attorney and he spent a lot of time with the state of Ohio and we were finally resolved of all the Ohio sales tax bills which came to nearly 100K.  Now, we are presented with a bill from our attorney for $2,200 that we must pay when the state of Ohio was wrong to bill us.  What can we do so that we don't have to pay this attorney fee?  Did the attorney not do the paperwork properly to prevent this from happening? Can I write to the attorney general of Ohio to get reimbursed for these attorney fees?  Can I sue the state of Ohio sales tax divison?  I would appreciate any advice you can give me.  Thank you.

Answer
You can do all those things.

But. . .

It will do no good.

You could also file a suit against the new owner, his actions did damage you.

But again. . .

It would do no good.

$2200 is a lot of money. All legal costs are a lot of money, and we should all strive to avoid "legal" whenever we can.

Hiring an attorney to file a suit will cost you more than $2200. If you won, you'd be losing, but you won't win against the state because "attempting to collect a debt didn't damage you". You hiring an attorney was optional, you could have contacted the state directly and tried to work it out. Those are some of the rebuttals that would be made if you did make a claim.

Did your previous attorney do it all, Right? Probably not, but they aren't required to it all right, they are just supposed to do their "best". Could the attorney have gotten the new owner to sign a "statement of responsibility" for all taxes from a given date. And could that attorney have given you that statement in a folder labeled: "In case someone tries to collect taxes. . ." But nothing ever works that perfectly.

I don't have a feel good answer for you.

There is no path for you to get any closer to even than you are right now. Any attempt to recover money from this experience will cost you more in money, time, heartache and ulcers than anything you might recover.

Rick

Tax Law (Questions About Taxes)

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Richard Fritzler

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Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.

Experience

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

Organizations
National Small Business Owners Association.
Publications
Contributing author to "The Corporate Standard Newsletter".


Publications
Contributing author to "The Corporate Standard Newsletter".
Ezinearticles.com articlesbase.com

Education/Credentials
I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

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