Legal Question in Tax Law in New Jersey
Liablity of Corporation of Past Officers Tax Liability
If an officer and/or corporation was not responsible for delinquent taxes prior to being an officer of the corporation, does the State of NJ have the right to go after the corporation to collect the taxes if they didn't get get the debt satisfied by it's previous officer, in other words, does the liability transfer with the corporation even if they weren't aware of the delinquent taxes, or does the current officer of the corporation have a right to tell the State they will not pay a previous tax due the State when the current officer did not own the corporation at the time the tax was due.
2 Answers from Attorneys
Re: Liablity of Corporation of Past Officers Tax Liability
Unfortunately, the answer is "yes." If you purchased a corporation (purchase of stock) you are liable for all of the corporate obligations even taxes for past earnings. Secondly, even if you buy just the assets of a business, you can be liable for the taxes owed by the business unless you file a special "Bulk Transfer" notice with the State.
I hope this helps!
Ronald J. Cappuccio, J.D., LL.M.(Tax)
Counsellor at Law
856 665-2121
http://www.taxesq.com/
Re: Liablity of Corporation of Past Officers Tax Liability
Answer is yes, whether you purchased the stock or the assets, or merged. If asset purchase, did you file a bulk sale notice, which might relieve you from the liability. If you bought the stock or merged, the new entity is liable for unpaid taxes, but you probably have a claim against the seller of the stock or the old corporation for failure to properly disclose this liability. Did you get a balance sheet or some representation on liabilities as part of the transaction? If so, what liabilities were disclosed? if this one is not on the list, you have a claim.
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