Legal Question in Tax Law in Massachusetts

A friend of mine owns a Home Health Care business. Her staff has been 1099 up until a few months ago. She got a letter in the mail stating she was going to have to undergo a workmans comp audit.

The audit took place today and she will now have to pay back $70,000+ in back taxes and that is before penalities and intrest. She will not have the true figure of what she has to pay until Monday, thats when the auditor will have the figure.

What should she do? She cannot afford to pay it all back. Should she file for bankrupcy, try and take out a loan and pay off the tax debt that way? She is very lost, and does not know what to do, and this could cost her, her business.


Asked on 9/05/12, 8:36 pm

1 Answer from Attorneys

She needs to contact an attorney immediately and workout at a minimum a payment plan. She violated the MA Statutes on who is an employee.

I do not know why a Workmen's comp audit would cause this. It is most likely she had a DUA audit for unemployment claims. This would result in the change in unemployment taxes as well as other potential taxes.

I have a partner who is a specialist in dealing with such matters, if she needs someone to assist her. Likewise, bankruptcy is not likely to get her out the problem at this stage.

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Answered on 9/06/12, 8:29 am


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