I owe back Ohio state sale tax from a business I was involved with 20 years ago. I can't pay - what can I do?

Question

My father owned a very small business in Ohio in 1987. He got sick and asked me if I would put the business in my name so he could get help with his medical bills. I did. Business was bad and I had to use every bit of money to support my mom and dad and my family, therefore I fell behind on sales tax payments. I was unable to get caught up and the business closed.

Now I have penalties, interest, additional penalties and I owe approx. $100,000 dollars.

Mind you, I made $300 per week in this business. It was very small.

I submitted an offer to the state and they said they will take a $20,000. lump sum.

I own nothing of value, cannot get credit because of this debt, I cannot afford to pay this? I live paycheck to paycheck.

Is there anything I can do?

Answer 1

I would hire professional accounting help to get you throught this.  You wouldn't go to court without a lawyer, so don't talk with any tax agency without representation.  Preferably someone who is comfortable negociating.  I know a firm who are good negociators, but they are in California.  This can be done from anywhere in the country, but you'll pay pennies on the dollar with the right representation.  The california company's web site is rojascpa.com  you could also try goodaccountants .com as well

Answer 2

So contact an irs attorney and they can help you in all the steps that you need to do to get this matter handle.

Answer 3

The State of Ohio has established a formal Offer in Compromise Program that allows the Attorney General, with the consent of the state agency, to compromise a claim for less than what is due for economic hardship.  The state saying they will take $20,000 seems arbitrary (it may be too much or too little, there is no way I can tell) The procedures require that taxpayer to document his situation an propose an amount to pay.  If you have nothing of value and don't have the ability to make substantial payments, you would be a candidate.

I am an enrolled agent, a tax specialist licensed by the US Treasury Department to represent taxpayers (along with attorneys and CPAs.)  Individual states normally give EAs the same representation rights that CPAs and attorneys have. I specialize in cases of people with large outstanding tax bills. If you would like some additional information outside this forum, you can send me email through my profile.

Answer 4

They might be willing to take payments.  Since it's sales tax, and you collected it and kept it rather than forwarding it to the state, they aren't likely to be willing to negotiate further than they already have - that is most likely going back to the original amount, and wiping out penalties and interest.