u/EveningPotential2790

▲ 2 r/tax

LLC in mexico for 18 months and might owe back taxes to 5 states

So I started my software services LLC about 2 years ago in Delaware. It was registered, legit setup, everything proper. About 18 months ago my partner and I decided we wanted to travel while we worked so we both moved to Mexico. We figured since the company is Delaware registered and we're just working remotely, we were fine. We filed our federal returns, paid federal taxes, thought we were good.

Tonight I was doing some spring cleaning of old files and found an email from our accountant from like 8 months ago that I apparently never fully read. I pulled up the email again just now and started reading and I'm going to throw up. Apparently when you operate a US business, even if you're physically located outside the US, you may owe state taxes in any state where you have economic nexus or where your clients are located. We have clients in California, New York, Texas, Florida, and Illinois.

I immediately called my accountant , we apparently should have been filing and paying state taxes in all five of those states this whole time. We didn't do any of that. Not a single return. Not a single payment. He said in the best case scenario we're looking at maybe $15k-20k if we do a voluntary disclosure right now. But if the states audit us first without us coming forward, the penalties could be way worse.

I have no idea why I thought that. I should have asked more questions. Our accountant literally emailed me about this and I just... didn't read it properly. The worst part is my partner is going to absolutely lose it when I tell him tomorrow. We're splitting the bill on this nightmare and he's going to think I'm incompetent which... fair.

I'm trying to figure out if there's any way this doesn't completely tank our business or if we just have to bite the bullet and deal with it

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u/EveningPotential2790 — 9 days ago

I feel like an idiot right now. Got my assessment notice a while ago, looked at it, thought yeah i should probably deal with this, then life became busy and completely missed the appeal deadline.

Now i’m looking at a much higher tax bill for the year and there’s nothing I can do from what the county office told me. they said you missed the deadline by, that’s pretty much unless there’s some major clerical mistake.

What annoys me most is i had decent comps showing similar houses selling for less, i just kept putting it off.

has anyone found any workaround after missing the deadline or is it game over until next year?

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u/EveningPotential2790 — 16 days ago

I read about appealing property taxes online but it seems straightforward or hackneyed & too good to be true.

For anyone who’s done a property assessment appeal:

How long does it take?
Do you need professional property tax consultation?
Do you get a property tax refund?

Does it work?

Trying to figure out whether this is worth doing or just red tapism of bureaucracy.

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u/EveningPotential2790 — 17 days ago