Sales Tax - Case Studies
An individual did a stock sale and purchased a new business and continued to do business under the same federal and state Identification Numbers of the previous owners. Had this client been our client to begin with, we would have advised them to do an asset sale (not a stock sale) and also advised to form their separate entity and obtain different ID numbers. It was discovered that the previous owner was underreporting sales when the sales tax department came to audit the client. The new owner switched to Krishnan Company as a client for our services.
First of all, we helped the client finish through their audit that involved underreporting of sales by the previous owner. In addition, we helped them form their own entity and obtained all new identification numbers to avoid future audits and tax liabilities of the previous owner. We also followed through with the IRS and state to avoid any further liabilities.