I am thinking of buying an existing business. I have known the person I'm buying from for 16 years. I need to know if I buy the business and the IRS comes back and audits the business from when this person owned it then would I be the one being audited or would she? I think she may have took money off the top so I don't want to buy this business and then the IRS come to me in a couple of years for something she has done. Any help would be appreciated.

When purchasing business, buy the assets of the company not the stock. As such, you will not assume or be liable for known or unknown liabilities of the company.

Yes, you want to merely buy the name, and the physical items ( stock)
You will want to hire an attorney to do the paper work to lower your liabilities

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Originally Posted by lgilber1227

I am thinking of buying an existing business. I have known the person I'm buying from for 16 years. I need to know if I buy the business and the IRS comes back and audits the business from when this person owned it then would I be the one being audited or would she? I think she may have took money off the top so I don't want to buy this business and then the IRS come to me in a couple of years for something she has done. Any help would be appreciated.

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You should normally use a property agent or an escrow company to do the deal. The escrow company will put an add a paper reporting the sale of the business and will invite objections. They will also get clearances from various departments.