Legal Blog Articles by James F. McDonough
James F. McDonough is a corporate tax planning attorney who writes articles on corporate tax planning, corporate transactions & business, and deal structure & guidance.
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Agreements Among Business Owners: Still A Good Idea And Why It Should Address Many More Issues
Author: James F. McDonoughDate: July 12, 2018
Shareholder Agreements, Buy-Sell Agreements, Partnership and Operating Agreements (collectively, “Agreements”) are frequently-used terms to describe agreements among business owners. Hopefully, the Agreement, whatever its title, covers issues such as contributions of property and services, management, voting, dispute resolution, and ownership transition.
One of the uglier issues facing business owners is the personal liability for the trust fund portion of payroll taxes withheld from employee wages. As anyone who has been employed knows, an employer is obligated to withhold payroll taxes from the wages of an employee. This withholding is known as the Trust Fund Portion and is in addition to the payroll tax the employer must pay from its own funds. When the Trust Fund Portion is not paid over to the government, the tax collector invokes the responsible person doctrine. In its elementary form, the doctrine imposes personal liability upon owners, officers and managers for payment. The doctrine extends its reach to those individuals who have the ability to direct the payment of funds. While this blog does not attempt to analyze years of case law, a rule of thumb is that check signing authority makes an individual a responsible person. A caveat to that rule is that anyone who exerts direct or indirect control over who the business pays will also be considered as a responsible person. Many cases exist where one who is essentially a bookkeeper with check signing authority is controlled by an owner who does not have check signing authority in an effort to protect the owner from liability. As the owner typically has more money, they become a natural target of the tax collector.
The Offshore Voluntary Disclosure Program Is Closing Down
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