Corporate Restructuring

When Corporate Restructuring Makes Sense

If your business has incurred income or employment tax debt, then you may need to consider restructuring your business to resolve these liabilities. We can help your business file lien discharge applications so that business assets can be legally transferred out of the business.

Corporate restructuring is often the right approach when a business is otherwise viable but is overburdened by tax debt, facing aggressive IRS or state collection actions, or operating under a structure that no longer serves its owners' goals.

Common Restructuring Strategies

There is no single approach to corporate restructuring. Depending on your goals, our attorneys may recommend:

Merging or consolidating entities to streamline operations and consolidate tax obligations.

Converting from one entity type to another — for example, from a partnership to an LLC or S-corporation.

Dissolving non-performing or inactive entities that are creating unnecessary tax exposure.

Filing lien discharge applications so assets can be transferred out of an encumbered entity.

Negotiating an installment agreement, Offer in Compromise, or bankruptcy filing as part of the restructuring.

Federal Tax Lien Discharge

A federal tax lien attaches to all property and rights to property held by the taxpayer at the time the lien arises, as well as to property acquired afterward. This can effectively prevent the sale, transfer, or refinancing of business assets.

Under Internal Revenue Code § 6325(b), the IRS may discharge specific property from the lien if the underlying tax has been paid, the property has double the value of the lien, or other limited circumstances. Our attorneys prepare and negotiate these discharge applications so your business can continue operating and transferring assets as needed.

Strategic and Tax Considerations

Restructuring decisions have significant tax consequences, including:

Potential cancellation of debt income (COD) under IRC § 61(a)(11).

Transfer of appreciated or depreciated property between entities.

State tax implications under Utah law and the laws of any other jurisdictions in which the business operates.

Self-employment tax, payroll tax, and Trust Fund Recovery Penalty exposure for owners and officers.

We work closely with our clients and their accountants to ensure restructuring decisions are made with full awareness of all relevant tax consequences.

How We Help

Michelle Turpin P.C. represents business owners through every phase of corporate restructuring:

Evaluating your business structure, tax exposure, and long-term goals.

Recommending the appropriate restructuring strategy for your circumstances.

Preparing and filing all entity actions, including mergers, conversions, and dissolutions.

Negotiating with the IRS and Utah State Tax Commission on lien discharge and tax settlement matters.

Coordinating with your CPA or accountant to ensure clean execution.