Monday, February 23, 2015

1. If you have to pay back taxes to the City of Los Angeles as a sole proprietor, does it become public record or is it protected and privat...

Question

1. If you have to pay back taxes to the City of Los Angeles as a sole proprietor, does it become public record or is it protected and private information?

2. Is it considered a very negative thing to have to pay back penalty taxes to the City or not a big deal (particularly if done out of error and not intentionally)?



Answer

It is typically private, however it has been known that these tax debts will hit the credit reoprting agencies and it will follow you for a long time.



Answer

I would say as to #1, if the back tax is for something pretty basic like failure to pay business license fees, there is no public record and little likelihood of anyone accessing it under a freedom of information type law. If the city had to sue you, or place a lien, that would be a different matter. As to #2, again, if it's just failure to get a business license and pay the fee, no big deal. Even county property taxes may not raise many eyebrows. Unpaid taxes become a big deal when there is a lien, foreclosure, or some administrative or court proceeding.



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