Sam Brotman, JD, LLM, MBA December 1, 2013 5 min read

Why Retain a Sales Tax Attorney for your Collections Matter?

Why I Believe You Should Retain a Sales Tax Attorney for Your Board of Equalization Collections Matter?

Although I am generally a big proponent of self-help legal solutions, I am also cognizant of the situations that require the assistance of an experienced sales tax attorney. One of the areas where I feel sales tax attorney representation is essential, not just an option, in the in areas of sales tax collection matters. Given the difficulty that I have encountered in practice when taxpayers try to handle their own Board of Equalization collection matters and the rigidity of the Board of Equalization, I would recommend hiring a sales tax attorney for the following general reasons.

The Assessment Phase

There are two sides to a sales tax collections matter: the assessment phase and the collections phase. One the one hand, the Board of Equalization is infamous for trying to extend sales tax liability for as many corporate officers, directors, shareholders, and others involved with the corporation as possible. The reason for this is that assessed individuals are jointly and severally liable for sales tax liability. Thus it makes sense for the Board of Equalization to try and assess as many people as possible (more assessments equals more collections targets). Unfortunately for taxpayers, these assessment often are not reflective of who is actually responsible for any past due sales tax liability. The Board of Equalization has a tendency to use rather tenuous connections in order to make their case for liability.

The Collections Phase

On the other end of the spectrum, when it comes to collections, Board of Equalization collections officers have a reputation for being the most inflexible and the most aggressive when it comes to taking action against a past due account. Collection officers will frequently demand large, unrealistic payment amounts from businesses (under the threat of levy) in order to get as much money as possible toward the payment of the balance due. This is not to suggest that this practice is standard across the Board of Equalization, as some of their collections officers are very nice people. However, it is has been my experience in practice that the Board of Equalization can be the most difficult state revenue organization to deal with. In addition, individuals involved with a corporation (specifically those who supervised filing of sales tax returns and payments) can be held personally liable for the amount of sales tax owed. There is no requirement that a person hold ownership in the company for this to be true. People routinely involved with sales tax calculations or paperwork (bookkeepers) and those listed on the sales tax license (unrelated parties) are often found to be liable. Finally, in addition to liens and levies, the Board of Equalization has the power to revoke the seller’s permit for a business, effectively shutting them down by prohibiting them to make sales. Those businesses that continue to make sales are severely fined by the Board of Equalization and occasionally prosecuted and sent to jail (selling without a permit is a misdemeanor offense).

In conclusion, for the reasons stated above, I believe the presence of a qualified sales tax attorney can greatly make a difference when it comes to dealing with a Board of Equalization collection matter. Sales tax attorneys have a practical grounding in the law along with Board of Equalization procedure and their knowledge can make a difference when it comes to successfully resolving your sales tax matter.

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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