If I buy a business with previous tax problems, will it be a problem for me?

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If I buy a business with previous tax problems, will it be a problem for me?

Asked on February 8, 2013 under Business Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If you buy the corporation or limited liability company, then yes; in those cases, you buy the business entity itself, so the entity remains liable for its tax problems.

If you buy the assets (e.g. customer list, equipment, inventory, name and "good will," intellectual property), then you would not be liable for the former tax debts or issues, EXCEPT that if there are any tax liens already against anything you are buying, those assets cannot be transferred to you until/unless the underlying debt is paid.


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