I purchased a business and was assessed a liability for taxes incurred by the previous business owner. Do I qualify for an OIC?
Yes. Effective January 1, 2009 through January 1, 2013, if you inherited a liability as a “successor” of a business for your predecessor’s tax or fee liability, the liability is eligible for an OIC, as long as you were not part of the predecessor’s business. However, if you were notified by the Board through a Sales Tax Clearance Request or through an open escrow, that the predecessor had a liability prior to purchasing the business, your OIC will not be considered. For example, you initiated an escrow to purchase the business and were notified that a liability existed. If the escrow is cancelled and you later purchase the business without obtaining a tax clearance from the Board, you were aware of the liability prior to your purchase and circumvented payment to the Board. Therefore, the Board will not compromise your successor liability.
