Fast Food Clusterbunk - the investment that ruined my life.

[sourgr8ps]

Hmm...another question I have, why is, or are they allowed to, go after the partners in a corporation individually? I mean they have come after my father for one amount and his partner for another. Shouldn't they tax the corporation one amount and have it divided accordingly?

 

[Zigner]

Hmm...another question I have, why is, or are they allowed to, go after the partners in a corporation individually? I mean they have come after my father for one amount and his partner for another. Shouldn't they tax the corporation one amount and have it divided accordingly?

It seems to me that your father should be discussing this with financial advisers and attorneys.

Good luck to him.

 

[sourgr8ps]

Yes Zigner I think he should as well, but as you can deduce from this entire story, he is quite incompentent at doing what he is supposed to do, leaving me to clean up or tie all loose ends.

I thank everyone who has given advice so far.

 

[HomeGuru]

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.

**A: I got to read this again.

 

[davew128]

Why is it YOUR job to clean up HIS mess?

 

[sourgr8ps]

Because he's my dad, and he's clearly not able to handle it alone.

DOes anyone have any advice?

 

[Dave1952]

Your father was president of the burger joint, president of the parent corporation, et c., so he was not a silent partner. Why he is now lying to you is alarming. Your father, who probably has records and quite a bit of knowledge, attempted to gain skilled legal help. These professionals saw no way to save your father from the irs. So, why do you hope to fix this situation? Remember that you are not licensed to practice law. Do you have some special skills in the area of accounting or business management?
I hate to say it but it sounds as if your father has made a real mess. Since he is being pursued personally the Gov has successfully pierced the corporate veil. Thrusting this mess on you may be a great way for him to shift the blame onto your shoulders. I'd suggest that you avoid this, I really, really doubt that you can fix anything.

 

[Dave1952]

Your father was president of the burger joint, president of the parent corporation, et c., so he was not a silent partner. Why he is now lying to you is alarming. Your father, who probably has records and quite a bit of knowledge, attempted to gain skilled legal help. These professionals saw no way to save your father from the irs. So, why do you hope to fix this situation? Remember that you are not licensed to practice law. Do you have some special skills in the area of accounting or business management?
I hate to say it but it sounds as if your father has made a real mess. Since he is being pursued personally the Gov has successfully pierced the corporate veil. Thrusting this mess on you may be a great way for him to shift the blame onto your shoulders. I'd suggest that you avoid this, I really, really doubt that you can fix anything.

 

[davew128]

Dave1952, please stick to topics you know about. If nothing else, this isn't an IRS issue, which was made apparent in the first post.

This ALSO isn't a corporate veil issue. It's an state trustee tax responsible person issue. The father may or may not have actually been a responsible person to ensure those taxes were paid, we don't know. However when the taxing agency comes looking for those trustee taxes and someone who is or was an owner of the business doesn't respond to inquiries, yes that person WILL be held responsible regardless of whether they should have been or not, hence my comment about the abject stupidity of ignoring the letters.

sourgr8ps, this ISN'T your issue to deal with. Period. What happened to the other partners is ALSO not your issue, nor quite frankly is it your father's.

 

[sourgr8ps]

Question.

After learning the hard way, and from the forum that I only have one option, With whom would I negoiate the total amount? And Would I be able to/need a lawyer to help me in that matter?

 

[sourgr8ps]

HomeGUru?
Have you read it again? Your thoughts?

 

[davew128]

This isn't your issue. YOU do not negotiate it. They will not talk to you.