I have a case where an S-corporation that closed during
2004, had a sales tax audit during 2005 that was settled in
2006. There was $39,000 in total sales tax paid as a result of the audit to New York State along with $9,000 to the CPA (not me) which is divided among 3 S- corp shareholders I do the personal taxes for two of the shareholders. My question is this. How does the $13,000 in sales tax paid by each of the two shareholders get recorded? Even though the corporation was closed during 2004, would a 2006 corporate return be filed (which would then flow to their individual returns since it was an S-Corp) Or, would it go somewhere directly on their personal returns without filing a corporate return? I know there is a sales tax category on Schedule A, but that is for personal sales tax and even if I put it there, then the state and local taxes taken from their W-2s could not also be claimed. Also, if the sales tax goes on the personal return, I assume the $3,000 in CPA Fees would just go on Schedule A as tax preparation. Does anyone have any idea on what to do? Thanks!
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