Successor Liability

Tax Attorneys to Help Defend Against Successor Liability

Buying a business (or starting over with a new business) can be a rewarding experience if done right, but, all too often, new owners of a business close the deal only to discover that the business hasn’t paid its taxes – often in years. Under the law, these tax debts can fall on the new owner and, in some cases, can even result in the business being shut down.

If you bought your business and are now looking at a successor liability claim, check with Business Law Southwest, LLC, to see if we can put our expertise to work and fight it for you. Many successor liability claims fail because the government can’t prove its case, and successfully pushing back on a successor liability claim can mean the difference between staying in business and closing up shop.

What is Successor Liability?

In general, successor liability is legal rule (by statute or doctrine) that allows a creditor to seek recovery from the purchaser of a business, even when the purchaser did not expressly assume such liabilities as part of the purchase. The rule varies from state-to-state, but it is important to emphasize that “an asset purchase” will save the purchaser from a previous tax liability.

When Should I Contact Business Law Southwest, LLC About Successor Liability?

If you’re just buying a business and haven’t closed the deal, talk to us about asking for a Tax Clearance so that the IRS or State of New Mexico can’t come after you later for the last owner’s taxes.

If you’ve recently purchased a business, and just learned about a previous undisclosed tax liability, call us to talk about your options and rights. In some cases, you may have a cause of action against the seller. In other instances, we may be able to help defend against a successor liability claim by the relevant taxing authority. Each situation is very fact specific, and it’s important that you talk to a qualified tax attorney.