Are all partners responsible for the tax debt of a partnership?
- October 5, 2021
- David Greene
- Comments Off on Are all partners responsible for the tax debt of a partnership?
The rule is that, in a general partnership, every partner is liable for all debts of the partnership. If you wanted to be shielded from liability, the partnership should have been set up as a limited partnership with a general partner and limited partners, whose only risk would be the loss of their investment. Since you are a general partner, the IRS takes the position that you are involved in the business and are liable for these taxes. Even if you have an agreement with the other partners that they will not hold you liable for debts, that agreement will not be valid against the IRS since the IRS did not agree to it. You would have to sue the other partners who agreed to be responsible for the tax debt.