I am considering buying a business and recently learned that the current owner is paying his employees by check but reporting the expenses as “outside services“. He is neither taking out taxes nor giving the employees 1099‘s. Is this something that could come back on me in the future if I buy this business?
Absolutely it could come back to haunt you. You should purchase assets only, NOT the business and make sure to exclude all liabilities and specifically name the one you reference here.
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