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Fast Food Clusterbunk - the investment that ruined my life.

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sourgr8ps

Junior Member
What is the name of your state (only U.S. law)? New York

I am in a bit of a tax mess right now. Years ago was the president of a fast food establishment, president of that corporation, and leaser of the property. 25%, shareholder along with two others, 25%, and 50% shareholders. THe agreement was that the name would be mine and I remain a silent partner, as I am a full time practicing dentist, I would only collect my portion of the profits.
However, this venture was perhaps the worst investment I could have ever made. According to my "partner" and employee, there was never any customer and we were quickly going into loss, (probably lying but there was no way for me to prove it).
Two years later, and many missed rents and monies lost, I decided to sell my part of the business. With having the 50% owner "take off" and nowhere to be found, I sold my 25% to the other partner/employee, but the required paperwork never made it to the necessary relevant department.
The NYS Dept of taxation and finance thought I was still owner/president/ full shareholder of this corporation for the next number of years.
While taxes were files accordingly, eventually my "partner" thought, no sales and only losses means filing was not necessary, and never file the last year of the corporations taxes.
I did get letters from the NYS taxation office asking for tax money (sales), but being tht I had sold my shares and washed my hands of that plagued fast food restaurant, I ignored them and passed those notices on to my now ex-partner.
Fast track, some years later, ex-partner sells the corporation, doesnt inform me, pockets the cash with a BS story of getting robbed at gunpoint-right-down-the-block-after-they-paid-me-the-cash. The new owners of the business had revamped the dilapidated fast food joint (this is important as NYS will examine this and figure a rent factor which is much HIGHER than we actually paid.)

The following year I get an audit in the mail claiming I owe over 100K to nys tax due to taxes not filed, interest and penalties, deadlines passed etc..
I went into denial, refusing to believe they had any substance in their claim, as I never saw a dime from that business.

All the while, my partner forged my signature on documents to get a credit card swiping machine (without my permission or knowledge) which also ruined my credit.

Longtime later, they placed freezes on my bank accounts, seized my car, and now froze another bank account of mine, this time joint with my wife. Another step they took is seizing an account with my wife being the primary name. For some reason they have linked my sales tax issue with my personal income tax and are trying to create a case out of this. Its no question that they mean business, but my issue is to let them know that I never made a dime out of all this, though they claim based on rent factor and constructive dividends the business was flourishing.

For the "partner" of mine, he was expected to pay 87,000 but was able to have his taxes reduced to roughly 25,000. How?? He wont tell me. But I get stuck to foot the bill for over 100k, and even after consulting some bigshot law firms in the area, and after thousands in legal fees, all I get is a "Sorry, you should have come to us sooner. But Good luck and let us know if you need anything in the future."

Why weren't the taxes divided evenly?
How did they give my ex partner such a break?
He has no passport and no bank accoutns, (deals in cash) has nothing to show, could that be part of the picture?
WHy wont they go after the 50% partner? He has run off and escaped scott free.
How do I get the rent factor formula down? Proving to them the unit was dilapidated and run down when I had the lease?
How do I get my taxes down, or how do I escape from paying excess taxes?
Does my profession and owning proprty have anything to do with it?
Whats the wosrt that could happen to me?

Is there anyone that can help tackle such questions? I hope I have explained the situation in quite detail. If you have any questions, please ask I will be more than happy to provide answers. I am absolutely lost and dont have any sense of direction.
 
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FlyingRon

Senior Member
That's a nice story. Please avoid even disguised profanity on these boards.

While you've given us all sorts of hysterical statements, there is something seriously wrong with this. Shareholders are not required to "sign" things nor do they incur personal tax liability for the business (other than what is distributed to them). I suspect that despite describing things as shareholders there's no corporate entity here.

You've left important details out. I suggest the only way you're going to get anywhere on this is to box up everything you have and take it to a lawyer.
 

LdiJ

Senior Member
Unfortunately for you the lawyer was correct. You waited far to long to deal with the problem. I don't see anyone being able to help you at this point.
 

tranquility

Senior Member
I agree with the others. There is no form to fill out. The best hope is to negotiate. But, if you have assets and income potential, I don't see reducing the amount after so long. You might want to get a detective and see if you can find out the others' locations. You might have cause of action there.

But, really, did you think there could be any real help here? I don't want to be cold, but it is time to face reality. Things are not going to get better quickly. There is a lot of hurt coming and you need to deal with that in an appropriate way.
 

davew128

Senior Member
Perhaps next time you get a tax letter addressed to you, you won't ignore as not being your issue to deal with. If the facts are what you claim, responding at the time WOULD have absolved you of responsibility.
 

sourgr8ps

Junior Member
Dear all,
thank you for your prompt replies, although not being the answers i was hoping for. TO let the cat out of the bag, its not me this story is actually about my father who mishandled and neglected the entire situation while I was away at college. I will mind my language in the future, my apologies.
The situation has been thrustn upon me now and I wasn;t a law student so I haven't the slightest clue as to what step I can take or even some elements of this story dont make sense to me eve, but that doesnt mean I wont do everything I can to help alleviate the severity of the situation.

FlyingROn - the state says 'as president of the corporation you are required to hire and fire and sign checks etc' though the argument here is that my father was to be a silent partner from the very start.

LdiJ: How does waiting this long affect whether or not I get a break/tax appeal?

tranquility: I didnt know what to expect from this forum, but I will take every piece of advice I can get, and having seen that othe forums provide great and helpful advice to others I thought I might be able to benefit, and get a sense of direction.

WHat else seems "wrong" with this story? I will clarify the details for you.
 

tranquility

Senior Member
To answer for others, the length of time has created some statutory presumptions against you(r) father.

You relaying a complex story that is not yours and you have little or no first hand knowledge is wrong.
 

xylene

Senior Member
You said you were a dentist, now this happened when you were at college. This is why we get confused

To accrue this kind of debt your business had either more receipts than you are letting or more than you believe/know.

Settling up your bad investment of this kind means dealing with the taxes.

Your former partner does not need to tell you anything and I was in his position I would not either. Why? Because there is no reason for him to admit anything. You were more than willing to leave him in the lurch, and think that your obligation to the matter was concluded by forwarding some mail. Which by the way would have been an incredible volume of mail given the amount of time and money involved.
 

sourgr8ps

Junior Member
I see,
Well regarding the tax issue, it is all regarding my father. I am a fresh college grad and this all happened while I was away at college. My father is the dentist, and not computer literate and that is why I must relay the story to you.

My dad is willing to pay the taxes as necessary, but the bloated penalty and fines are a bit much, no?

Is the issue here that everything was on my name and the former partner was free and able to commit as much fraud/delinquency as he wished, without having to deal with the ramifications (re: credit card machine fraud, etc)?

I think the biggest fault is my dad trusted the wrong person too much.
 

sourgr8ps

Junior Member
While I understand the numerous valid points mentioned above, I have to ask, Wouldn't my father be absolved of everything the moment he backed out of the business and sold everything, not having been accountable for anything that happened after that point? THat is his ONLY reasoning and defense, and to him makes all the sense in the world.

Would that defense hold a candle to the states claims?
 

Zigner

Senior Member, Non-Attorney
While I understand the numerous valid points mentioned above, I have to ask, Wouldn't my father be absolved of everything the moment he backed out of the business and sold everything, not having been accountable for anything that happened after that point? THat is his ONLY reasoning and defense, and to him makes all the sense in the world.

Would that defense hold a candle to the states claims?
Had your father PROPERLY extricated himself from the business, the he likely wouldn't be responsible for claims after that time. But...he did not.
 

tranquility

Senior Member
The best advice is to NEVER IGNORE TAXING AUTHORITIES!!!!

They want ever more money for...well for hookers in Vegas or whatever enters the powers that be minds. They have more power than anyone else and they never forget.
 

sourgr8ps

Junior Member
That is some sound advice, wish my dad had followed that.

I winder about my dads partner though, how is he able to get a massive reduction in his taxes owed (80k down to 27k)? Would it have anything to do with the fact that he was never on paper anywhere, except maybe as an employee?:confused: I'm getting the feeling my dads partner knew exactly what he was doing all along... :eek::eek:
 

tranquility

Senior Member
That is some sound advice, wish my dad had followed that.

I winder about my dads partner though, how is he able to get a massive reduction in his taxes owed (80k down to 27k)? Would it have anything to do with the fact that he was never on paper anywhere, except maybe as an employee?:confused: I'm getting the feeling my dads partner knew exactly what he was doing all along... :eek::eek:
The government goes by two things when a tax is owed when making a deal, how much one has and how much they think he can get.

I suspect dad has stuff and, as a dentist, he can earn more.
 
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