Personal Liability

An individual be can be liable for the unpaid taxes of a business. [1] When a business fails to pay the taxes it has collected, or should have collected to the Georgia Department of Revenue, the Department sends an assessment notice to the person it has identified as responsible for payment.  This notice creates a personal liability against the individual, and gives the Department the ability to take collections actions against the individual of the business for unpaid taxes. The assessment notice also describes the individual’s taxpayer’s applicable protest and appeal rights if he or she disagrees with being personally responsible.

Who can be assessed?

The Department must assess personal liability before taking enforced collection action against those personally liable.  Persons subject to personal liability include individuals who have the authority and control to collect and pay tax to the state as well as any person who has control or authority over the business’s funds and assets.  Examples include, but are not limited to, individuals who:

  • Serve as officers and directors
  • Control the business’s financials
  • Hire and fire employees
  • Sign checks
  • Control the company funds and bank accounts

Because an owner of a sole proprietorship or the individual partners in a general partnership are already liable for the debts of their businesses, no additional assessments are required. 

What taxes are subject to personal liability?

The Department may assess personal liability for any tax which a business is obligated to collect and remit to the state. The most common types of tax are sales tax and withholding tax debts. 

 




[1] O.C.G.A. § 48-2-52.