• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

sole proprietorship

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

ditzymiss

Member
What is the name of your state? New Jersey
Scenario: Man owns a family business. He has mega hospital debt in addition is applying for SSI disability permantly. In order to avoid the debt and receive SSI, he gets a new State ID number, lists his daughter as the owner, has her sign the papers and registers the business as such, therefore, nothing is in his name, but in hers.

1. Just what is the daughter liable for under these circumstances. Would she have to do her IRS and include the business income?

2. Is she now responsible for any taxes due and also liable for any issues that may arise as a result of being listed as the business owner?

3. Can he still sign checks to pay bills or would he have to open a totally new account with the new EIN # and put the account in her name?

4. Is this fraud?
 


JETX

Senior Member
ditzymiss said:
Just what is the daughter liable for under these circumstances. Would she have to do her IRS and include the business income?
Possible criminal fraud.
Yes.

Is she now responsible for any taxes due and also liable for any issues that may arise as a result of being listed as the business owner?
Yes..... and so is he.

Can he still sign checks to pay bills or would he have to open a totally new account with the new EIN # and put the account in her name?
Depends on whether his name is still a signatory on the account.... and whether hers is.

Is this fraud?
Yes. Both civil (creditor fraud) and criminal (Social Security, etc.).
http://www.ssa.gov/reports/ssi/fraud.htm
http://www.ssa.gov/reports/ssi/fraud.htm
 
Last edited by a moderator:

ditzymiss

Member
Sole Proprietorship

Thank you so much for responding, however, I'm confused on some of the answers, i.e.:

How would the father be responsible for any liability or taxes, if the business is now in his daughters name?

In reference to the business checking account, it is in the business name with him as the only signer, but using the old EIN number...can u do that legally.

I am not involved in this situation at all, only know of it. The daughter is just a kid and really didn't understand the reality of it all and neither did I....I
was looking for some legal advice that's all, so I could give her sound advice...I have nothing to hide here...not really my problem, I'm just concerned...I didn't know it was illegal to care:)

Your advice is welcome...thank you!
 
Last edited:

JETX

Senior Member
ditzymiss said:
How would the father be responsible for any liability or taxes, if the business is now in his daughters name?
Because when he is caught in SS fraud, he will be liable.

In reference to the business checking account, it is in the business name with him as the only signer, but using the old EIN number...can u do that legally.
Yep. But one of the flags that the IRS, SSI, etc. will catch is HIS name (signature authority) on the account he claims is no longer his!!

I am not involved in this situation at all, only know of it. The daughter is just a kid and really didn't understand the reality of it all and neither did I....I
was looking for some legal advice that's all, so I could give her sound advice...I have nothing to hide here...not really my problem, I'm just concerned...I didn't know it was illegal to care:)
Ever heard of 'obstruction of justice'?? The feds take that VERY seriously.
Did you realize that your KNOWING of a crime and not reporting it.... makes you guilty also?? :eek:
 

ditzymiss

Member
Thank you for again responding. I am well aware of obstruction of justice and to my knowledge, the deed has not yet been done. The point of my posting these questions, was to find out the legality of it all, of which seemed fishy to me to begin with. Trust me, I will give this girl the advice you gave me and pray she listens. She's a good kid, but apparantly is trusting the wrong person, and I'm glad she came to me for advice.

Thanks for your concern, there is no one more than me who dispises liars and people who use other people for their gain.

Your advice is greatly appreciated..I'll keep you posted:)
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top