Legal Question in Tax Law in New Jersey

Personal Liability for Corporate Taxes?

I terminated opterations of my 1-person (me) engineering consulting corporation on 12/31/01 and filed my final return.

I recently learned that NJ does not deem a corporation dissolved until dissolution is properly filed and a tax clearance certificate is issued.

Therefore, they want to charge my defunct corporation $550 for 2002, and $550 for 2003 and on and on for every tax year until the corporation pays. The $550 is comprised of the $500 minimum corporate NJ Tax (regardless of whether there is a profit or loss) and the $50 annual corporation filing fee.

I wrote them a letter explaining that my operations ceased in 2001 and all taxes were paid in full. I indicated to them that the corporation has no assets.

My question is: Do I have any personal liability for these ongoing fees?


Asked on 4/16/03, 7:30 am

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

Re: Personal Liability for Corporate Taxes?

JUST BY NO LONGER USING THE CORP DOES NOT CLOSE IT WITH THE STATE. YOU CONTINUE TO BE REGISTERED AS AN INACTIVE CORP UNTIL YOU FORMALLY DISSOLVE. THIS MAKES YOU RESPONSIBLE FOR THE MINIMUM TAX AND ANNUAL REPORTS. USUAL THING IS TO FORMALLY DISSOLVE (END THE CORP WITH THE STATE), WHICH HAS A SPECIFIC PROCEDURE (GETTING TAX CLAERANCE, FILING CERTIFICATE OF DISSOULUTION, ADVERTISING, ETC.) IF YOU DO NOT FILE RETURNS FOR 2-3 YEARS OR SO, THE STATE WILL REVOKE YOUR CHARTER BY ITSELF. HOWEVER, UNTIL THEY DO THIS, YOU TECHNICALLY HAVE RESPONSIBILITY TO FILE AND TO PAY THE MINIMUM TAX. THE ONLY PERSONAL RESPONSIBILITY IS FOR THE ANNUAL REPORT ($50/YEAR). IF NOT FILED, THEY CAN ALSO REVOKE THE CHARTER, AND, IF THEY DESIRE, CAN ASSESS YOU $250/YEAR PERSONALLY. THEY USUALLY ADVISE YOU OF THE RIGHT TO PAY THIS BEFORE PERSONAL RESPONSIBILITY IS ASSESSED. YOUR CHOICE IS - FORMALLY DISSOLVE FOLLOWING THE PROCEDURES, OR LET THE CHARTER BE REVOKED BY SEVERAL YEARS OF NON-FILING. BUT AT LEAST PAY THE ANNUAL REPORT FEE UNTIL THIS IS DONE, TO AVOID THE PERSONAL LIABILITY.

Read more
Answered on 4/16/03, 12:49 pm


Related Questions & Answers

More Tax and Taxation Law questions and answers in New Jersey