Tax issues? They are no joke!
I’m dealing with a client who, in addition to facing millions in bank debt, is also looking at about a hundred thousand dollars in sales tax debt.
This is a nasty, nasty thing. State tax entities (and federal of course) AUTOMATICALLY supersede any private lending institution that may have a security interest in a business entity.
That means, without warning, the department of revenue (or DOR) can swoop in, accelerate ahead of a big lender, and take legal action against the business (i.e. shut it down).
How does this affect my job? Simple – leverage. I’m going to get the meanest, nastiest letter from the DOR which states they’re about to shut down the business, and forward it on over to the secured parties involved. They are no longer in a powerful position to exert their will over the situation. This is a very powerful negotiation strategy – working the various parties involved against each other for my client’s benefit. Very similar to the concept of “divide and conquer”.
