Legal Advice City business license

[wallygator69]

Hi,


My brother just got a notice for the need of a business license for a rental condo.



He has owned it for 15 years and just got the notice this year. The city wants gross receipts from day 1. He doesn't have his 1099's before 2015. The gross receipts average $30k per year $450k total yet his net is $5k per year. There are going to penalties..


He wants to report only back to 2015 which will still be a $180k. He thinks they would be happy with the "windfall" and go deeper...



The application states...... I declare under penalty of perjury the foregoing is true and correct and that I am an authorized representative of this business.



What could possibly happen if he just says he gave them what he could off the 1099's he has.



Thx


Wally

 

[NgineER]

No idea-you would have to look at what the local codes say. What does his property tax records say, is he written at the address? I’d suggest a couple of calls to the local office to get more details. This could most likely be done anonymously. This could help understand what the requirements are and fees/penalties might be. I’d also look into a variety of landlord real estate groups to see if there is someone with a similar experience in the area.

Best of luck.

 

[njhowie]

Instead of making assumptions, going off of what he wants to do, or taking the word of unknown (though well-meaning) folks on this site, it's probably in your brother's best interest that he go visit with a local tax attorney to handle the issue for him and expense it to the business. In my view, the potential amount saved, and avoiding any legal issues which might arise would be well worth the attorney fees.

What could possibly happen if he just says he gave them what he could off the 1099's he has.

Well, obviusly if the city learns otherwise (maybe they pull his tax records from the IRS for the past 15 years), your brother could be taken to court for perjury and assessed the taxes due, penalties, interest, and/or possibly go to jail. That's just speculation from my own, non-legal background.

Tell your brother not to take this lightly, as the amount of money involved is significant, and the potential for legal issues is high. The expense of the attorney to handle it would be well worth it to be safe.

 

[wallygator69]

Yes will recommend he contact attorney.


Thx


Wally

 

[Montecfo]

**this is not legal advice**

Gross receipts taxes are onerous, and can really be costly to small businesses because they ignore taxable.onxome.
But was the need for this not known? Was he expecting this?

I would wonder when the law came into effect and whether he is clearly covered by it. In my experience, the taxing authority's website may include the relevant law and regulations. An anonymous call to them could provode further info. Also could try a local CPA. But he probably clearly owed it or clearly does not. Do you know what triggered the notice?

If he does owe the tax, lack of 1099s is not a hurdle. Gross rentals per his tax returns is the figure.

And, of course, he can always try just filing 3 years.

Good luck