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I owned a business which has since closed, but the state is saying I still owe sales/use tax. Is there a statute of limitations?

Full Question: In 1991 I owned a Bar which has since closed. The state of Wisconsin is saying I owe sale/use taxes for that year and have tacked on interest and penalties of $28,000 to add up to $41,000 and they are trying to collect it by levying my Business account.

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Answer:

Diane Yetter photoGenerally, the statute of limitations which defines the time frame within which the state can make an assessment of tax is four years. However, there is no limitation in cases where a required return is not filed or where a false or fraudulent return is file with the intent to defeat or evade the tax. It is not clear from your question as to whether your business was registered and filing sales tax returns timely. In regards to the levy on the business account, this is also permitted when the state feels it must issue a jeopardy assessment. If the Department of Revenue believes that the collection of the sales or use tax will be jeopardized by delay, it can notify the person owing the tax of its intent to proceed under Sec. 71.91(5) for collection of the amount owing, including penalties and interest. In general, Sec. 71.91(5) authorizes the Department to issue a warrant commanding a sheriff of any county to levy upon and sell enough of the taxpayer's real or personal property in the county to pay the amount owed. The notice must be provided by certified or registered mail or by personal service. If within ten days of the notice the taxpayer furnishes a bond in an amount not exceeding double the amount owing with a surety approved by the department, conditioned on payment of the tax, the warrant will not issue. If you would like additional assistance with this matter, feel free to contact us and we can discuss options.

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