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lgilber1227 · May 6, 2008, 08:34 PM

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.

delite · May 6, 2008, 08:53 PM

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.

Fr_Chuck · May 6, 2008, 09:29 PM

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

MukatA · May 6, 2008, 10:46 PM

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.

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.