Legal Question in Tax Law in California

Sales tax in arrears

I have recently learned that the sales taxes for my business have not been paid for nearly a year because of the carelessness of a former business partner. I have met with the State Board of Equalization and filed these returns but do not have the money in full to pay for them in full (or even half.) The BOE is willing to help with a payment plan but cannot extend the terms out as far as I need them to in order to still pay other bills and keep my business afloat. If I make regular payments on this debt- even if it is not for as much as they ask- and I pay all sales tax on time from here on out can I still be criminally charged for sales tax evasion? If so, what are the chances that this would happen?

Thank you very much for your help.


Asked on 4/13/06, 7:55 pm

1 Answer from Attorneys
Donald Field Donald L. Field, Jr., Attorney at Law

Re: Sales tax in arrears

it is unlikely, based on the facts stated, that you would be charged with criminal tax evasion. however, there are costly civil penalties which can be asserted by the state. SEE Revenue & Taxation Code Sections 6476, 6477, 6479.3, 6480.4, 6480.8, 6511, 6565, 6591, 7051.2, 7073, and 7074 at:

http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=rtc&codebody=&hits=20

in addition, your sales tax permit can be suspended if you do not reach agreement on payment.

you may, of course, have a cause of action against your former partner.

you should retain an attorney or cpa with experience in dealing with sales tax issues.

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Answered on 4/18/06, 2:35 pm


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