Legal Question in Business Law in California
1. If you have to pay back taxes to the City of Los Angeles as a sole proprietor, does it become public record or is it protected and private information?
2. Is it considered a very negative thing to have to pay back penalty taxes to the City or not a big deal (particularly if done out of error and not intentionally)?
2 Answers from Attorneys
It is typically private, however it has been known that these tax debts will hit the credit reoprting agencies and it will follow you for a long time.
I would say as to #1, if the back tax is for something pretty basic like failure to pay business license fees, there is no public record and little likelihood of anyone accessing it under a freedom of information type law. If the city had to sue you, or place a lien, that would be a different matter. As to #2, again, if it's just failure to get a business license and pay the fee, no big deal. Even county property taxes may not raise many eyebrows. Unpaid taxes become a big deal when there is a lien, foreclosure, or some administrative or court proceeding.
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