Legal Question in Business Law in California

Re: corporate officer being garnished for taxes owed

Yipes! I'm guessing this is a problem that was ignored when it came up, and has gone through a lot of administrative action before coming to the point of personal garnishment. A little fire that has now gotten out of control and is about to burn the barn, the crops and the house.

I wonder also if there is a related Federal tax action pending against the same company that could affect the same officer or officers?

There isn't much help I can offer. In a general way, the officer's defense probably has to be linked to proof that he or she (1) wasn't personally involved in the corporate practice that resulted in the EDD liability in the first place, and (2) didn't receive any corporate distributions such as dividends while the EDD was left unpaid.

In any event, it is high time for this person to face up to this serious legal problem. Part of facing reality is to acknowledge that there are circumstances in which a corporate officer, director or shareholder can be held liable for corporate obligations, and that the taxing authorities often have the legal power to go after corporate insiders directly.

You may have a defense, or may have had one at the time the EDD claim was first asserted, but fighting a rear-guard battle at this point is going to be tougher and more expensive than handling it when it first came up.

Get a good tax-defense lawyer.