Tax issues in a failing business can feel like a maze to the bankruptcy lawyer. Towering walls and no vision of the path forward. Let’s break down the components and see how that influences the choice of chapter and the decision about who files the bankruptcy case. Types of taxes Start by identifying the kinds […]
Is Your Debtor Corporate or Corporeal?
Mitt Romney famously insisted that corporations are people. We can disagree about the nature and quantum of rights that gives them relative to human beings, but for the purposes of a business bankruptcy analysis, Mitt was spot-on. A corporation is a legal person separate from the individuals who own the stock in the corporation. When […]
Can You Clean Up After Business Closure?
Whether it makes sense to file a Chapter 7 for a corporation is a nuanced issue. Whether you advise to file Chapter 7 for the corporation or just shut the business down without bankruptcy, there’s some mop-up to do. Miss these wind up issues and the corporate officers will not sing your praises. Payroll taxes […]
Means Test: Getting Business Income Correct
I expect clients to conflate themselves and their wholly owned business corporation; I didn’t expect the new bankruptcy lawyer to treat the corporation as if it didn’t exist. Yet as I reviewed a B-22 for a rookie bankruptcy lawyer, I found all of the corporation’s gross income included in the means test for the individual […]
