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Q: General California Franchise Tax Board tax question for a corporation ( Answered 5 out of 5 stars,   0 Comments )
Subject: General California Franchise Tax Board tax question for a corporation
Category: Business and Money > Accounting
Asked by: tekin21-ga
List Price: $15.00
Posted: 27 Aug 2005 16:05 PDT
Expires: 26 Sep 2005 16:05 PDT
Question ID: 561242
If a California corporation was opened for a few years but there was
never any activity on it, no income earned, no assets or debts
acquired other than the minimum yearly tax, no bank accounts opened,
and no taxes filed, what usually happens if the the corporation was
ignored and never formally dissolved?  After awhile, would the state
go after just the corporation for the taxes or can they also go after
the directors?  I have heard from one CPA that the state would just go
after the corporation's assets and send collection notifications, but
after a few years they would just send it to the uncollectibles and
forget about it.  Is this correct?
Subject: Re: General California Franchise Tax Board tax question for a corporation
Answered By: taxmama-ga on 30 Aug 2005 08:03 PDT
Rated:5 out of 5 stars
Dear Tekin,

I had a long talk with the good folks at the California FTB 
last week, when they attached a client's bank account for 
unpaid corporate taxes resulting from his not closing
down the corporation properly. 

However, they attached a bank account that he had opened
using the corporation's name and taxpayer identification number.

It was not a personal bank account. 

So, here's the inside information. 

To date, the state of California will not go after the
assets of an officer of a dormant corporation. 

As long as you don't have any bank accounts under the corporate
ID number, and you never took any assets out of the corporation,
they will just send you notices and finally go away. 

They won't bother your personal assets.

It won't affect your personal credit. 

If you want to see some more information about how this works

So, trust your CPA. You're getting good advice. 

Best wishes. 

Your TaxMama-ga

Request for Answer Clarification by tekin21-ga on 01 Sep 2005 11:11 PDT
Thanks for the great answer TaxMama!  It's reassuring to know that
other ppl have been in the same situation.  I do have a quick
question...are you yourself a CPA or tax attorney from California? 
Just curious.  Thanks again!

Clarification of Answer by taxmama-ga on 01 Sep 2005 15:15 PDT
Dear Tekin,

Thanks for the enthusiasm.

Definitely, you're not alone.

I am enrolled agent, licensed by the US Treasury Department
to represent taxpayers before the IRS.

And yes, my tax office is in sunny California.
So I must know a bit about California rules.

Best wishes,

Your TaxMama-ga
tekin21-ga rated this answer:5 out of 5 stars
Great answer!  Thanks for your help TaxMama!

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