What situations contribute to hidden tax liabilities?
Many middle-market companies do not have large internal tax staffs, yet those companies are dealing with multistate and multinational operations, which frequently results in overlooked tax issues. Public companies have been subject to financial reporting standards requiring them to inventory their uncertain tax positions and disclose potential liabilities. But private companies have been granted an extension to that requirement through 2009; so the chances of encountering an unrecognized tax liability increase when acquiring a private company. Also, if you acquire a company that was part of an affiliated group, which has been filing a consolidated income tax return, the acquired company remains liable for the group’s prior taxes after its acquisition. Which state and local taxes are often overlooked? Employing out-of-state personnel may result in hidden income tax liabilities. For example, if a sales representative is soliciting business in another state and the product used to fill th
