Can a 7.5 percent partner with no management be liable for back taxes of the company? 3 Answers as of December 16, 2010My son was listed on my now defunct company's 2002 & 2003 tax returns as a 7.5% partner. He had no management say whatsoever and no corporate title. Can the IRS hold him liable for unpaid payroll taxes and penalties?
Mankus & Marchan, LTD | Tony Mankus
If your son had check signing authority and did, in fact, sign some company checks, the IRS could argue that he was a "responsible official" and propose to assess the trust fund recovery penalty against him for part of the unpaid payroll taxes. (IRC 6672). However, you have a right to appeal IRS' proposed assessment against your son, and even take the case to the US District Court. However, you should retain a knowledgeable tax attorney to help you through the process.
Answer Applies to: Illinois