Will incorporating your business protect your personal assets against back taxes?

Question

If there are mistakes in your sales tax returns can they take away your house and personal assets if your business is incorporated?

Answer 1

No, incorporating will not protect your personal assets from tax claims.  The law is quite explicit on this.

Corporate officers (and often majority shareholders in closely held corps) remain personally liable for all of the taxes of the corporation.  If the corp doesn't pay them, the government will turn to the corporate officers personally.

In addition, any employee of a business (any business, not just a corp) whose duties include preparation of tax returns and/or payment of taxes is also personally liable for the payment of the taxes if the business fails to pay them.  More than one bookkeeper has learned this lesson the hard way when the IRS came after them for the back taxes of a defunct business after the business owner told them to not pay the taxes!

Answer 2

lawyers have told me YES!!!

but I have read stories in the papers that show NO!!!

so who knows....maybe if the articles of incorporation and the maintanance of the corporation does not have all the i's dotted and t's crossed you will be just like not having a corp.