Many of our clients consider dissolution of their company as a way of mitigating the damages of a 941 tax issue. As we described, dissolution in many situations might just eliminate the tax problem because the debt "goes to the grave" with the business. However, many businesses naturally have "assets" when they dissolve. What does this mean to your dissolution or in the case that somebody wants to purchase your business or assets?
Selling the assets and making them lien-free. Example: Brown, Inc. has a $120,000 941 payroll tax debt and equipment that is worth $20,000 for quick value. They have decided to dissolve. Assuming that the equipment is un-encumbered with bank loans, the owners in theory have to give the value of these assets to the IRS. But what if someone wanted to buy the business and/or their assets? That would require the owners to get an appraisal of the assets and have their tax professional contact the IRS to clear the assets of the tax lien so they can be acquired "lien-free."
What if there is no buyer? If the IRS has someone assigned to your case, you will definitely need to sell the assets to pay the tax debt and move on. If there is no-one assigned to your case, you should list the value of the assets in a folder for record keeping, being fully prepared to pay the IRS the value of them if they contact you later on.
As we have discussed previously, the IRS has 3 years to assess the debt against you personally if you had a corporation. If you were a sole proprietorship they can assess you for 10 years after the tax liability is created. These statutes aside, you have a lot to consider if you have assets. If you have a buyer, there are even more things to contemplate.