Business versus personal liability for unpaid sales and witholding taxes… do I need to look at personal as well as business bankruptcy

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Business versus personal liability for unpaid sales and witholding taxes… do I need to look at personal as well as business bankruptcy

My business owes back witholding and sales taxes.Am I personally responsible if my business files for bankruptcy? And if so, is that covered under personal bankruptcy?

Asked on May 19, 2009 under Bankruptcy Law, Virginia

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I'm not a Virginia attorney, but many states make corporate decision-makers personally liable for unpaid sales and withholding taxes, as the federal government does with payroll taxes.

Ordinarily, tax liabilities have the highest priority in a bankruptcy proceeding -- the government gets paid in full, before anyone else gets a penny.  And if there are unpaid taxes left after all the assets are gone, usually the tax bills do not get discharged by the bankruptcy, you will still owe the money.

You need to discuss this with your bankruptcy attorney before you go further, and if you don't already have one, you can start your search for qualified counsel at our website, http://attorneypages.com


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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