Could a 7.5 percent partner with no management be liable for back taxes of the company? 7 Answers as of June 23, 2015

My son was listed on my now defunct company's 2012 & 2013 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?

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Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Not from how you describe his involvement with the company. The big test is whether he had check signing authority. If he signed checks for the company, he could be held liable.
Answer Applies to: Illinois
Replied: 6/23/2015
Campbell Law Offices, LLC
Campbell Law Offices, LLC | Linda S. Campbell
The IRS may try to assess the Trust Fund Recovery Penalty (TFRP) against your son because he is listed as a partner. They usually look first at who signed the company checks. If your son had signature authority, he may very well be held a "responsible person." Anyone who is held to be a responsible person by the IRS will be assessed the TFRP and the IRS will try and collect the debt from any or all of the responsible parties. They can collect all or part of the debt from anyone they choose and will usually go after the person that they can collect from in the easiest manner. If he did not have signature authority, he may still be held a responsible person by the IRS. I strongly recommend that you sit down with a tax attorney prior to any assessment. It is easier and usually less costly to keep someone from being assessed the TFRP than to have it withdrawn.
Answer Applies to: Connecticut
Replied: 6/22/2015
Irsfeld, Irsfeld & Younger LLP | Norman H. Green
That would is probably.
Answer Applies to: California
Replied: 6/22/2015
Ronald K. Nims LLC | Ronald K. Nims
Your referred to your son as a "partner", partners are responsible for all debts of the partnership, even a partner with a tiny percentage of the ownership. If your son was not actually a partner but a member of a limited liability company or a shareholder of a corporation, he would only be liable for taxes if was responsible for collecting, accounting for and/or paying the withholding taxes. The IRS views these activities broadly. For example, if your son either had the responsibility to decide which bills to pay or actually signed the checks/authorized the transfers, he's liable if he paid any other bills when the taxes where due.
Answer Applies to: Ohio
Replied: 6/22/2015
Vandervoort, Christ & Fisher, P.C. | James E. Reed
The IRS could assert a 100% responsible officer penalty against him. Based upon your description, he should contest that assessment. If he ignores the assessment, he could find himself on the hook for these taxes.
Answer Applies to: Michigan
Replied: 6/22/2015
    Polsinelli Shughart PC | William B. Prugh
    We need to know what kind of partnership & what kind of partner your son was. You mixed corporate & partnership terms in the message. The IRS definition of "responsible person" is very broad and could include him, depending on the type of partnership and the duties he actually performed. Go to the IRS web page at and look for a publication dealing with responsible persons and withholding taxes.
    Answer Applies to: Missouri
    Replied: 6/22/2015
    Andrew Gordon
    Andrew Gordon | Andrew Gordon
    Yes, the IRS will look to hold responsible parties liable, but it is possible that they could find him responsible.
    Answer Applies to: Illinois
    Replied: 6/22/2015
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