I'm under LOI on a business and it has come to light that the seller has not been filing business tax returns. They have been in the process of working with a CPA firm / tax attorney to get caught up. The business tax returns are in the process of being submitted to the IRS. Their books are clean and they have worked with a high quality outsourced bookkeeping firm over the last few years. I have done a QoE / proof of cash with no real red flags that came up. I am still getting to the bottom of the full situation for both their business and personal taxes but here is what I think I know. This is structured as an asset sale using an SBA loan and around 25% seller financing and we have good protections in place in the current form of the purchase agreement and are looking to beef those up.

- They have been paying payroll taxes for employees.
- They have now filed business tax returns (partnership).
- I believe they have some outstanding payroll tax liabilities on their personal tax returns since the business tax returns had not been filed in the past so K-1s weren't flowing through.

My question is what should I be concerned about related to seller's personal outstanding tax liabilities that could potentially come back to me in an asset sale?

What are the implications for an SBA loan in this situation?

Would love to connect with anyone with experience in a situation like this.