LLC, single owner, funneling money to LLC, two owners

[JDoe]

Jurisdiction

Florida

My spouse owns a single owner LLC (LLC-1), a medical practice. His brother/CEO began a second LLC (LLC-2) with two owners, him and my spouse. The division stated on the L-1 for LLC-2 is 50/50. One hundred percent of the money funneled into LLC-2 is coming from LLC-1 yet the distribution is 50/50. LLC-2 was open for three years, until my spouse's brother shut it down in 2014 when another doctor began working for the practice. I have only one year of tax returns (2012) for LLC-2 in which the total income declared is around 350k and distributed 50/50. LLC-2 itself did nothing other than funnel money from LLC-1 to be distributed. I was wondering if what the legal implications of this are. Has my spouse's brother been stealing from the company?

 

[adjusterjack]

There's no way to answer that question with the minimal amount of information that you have provided.

Does your spouse have any issues with the arrangement or the money?

Maybe it's your spouse you should be talking to.

 

[army judge]

Has my spouse's brother been stealing from the company?

Your recitation of events lead me to believe that someone is stealing money, or hiding income from the IRS.

This might be a good time to hire a CPA or tax attorney and conduct a forensic audit, before the IRS arrives and does one of their FREE audits, which everyone knows aren't as advertised, nor are they FREE!

 

[JDoe]

Your recitation of events lead me to believe that someone is stealing money, or hiding income from the IRS.

This might be a good time to hire a CPA or tax attorney and conduct a forensic audit, before the IRS arrives and does one of their FREE audits, which everyone knows aren't as advertised, nor are they FREE![/QUOTE

Your recitation of events lead me to believe that someone is stealing money, or hiding income from the IRS.

This might be a good time to hire a CPA or tax attorney and conduct a forensic audit, before the IRS arrives and does one of their FREE audits, which everyone knows aren't as advertised, nor are they FREE!

This is incredibly helpful. My spouse and I are in the beginning stages of a divorce. I have suspected some "unconventional" business practices on the part of his brother for years now. I wasn't sure whether his brother's business practices had crossed the line from being unethical to actually illegal. To further complicate things, my spouse's brother has been planning to divorce his wife for about three years. My guess is that as he was meticulously plotting, hoping to hide money and lower his worth so his wife's settlement would be less.

Unfortunately, he didn't suspect that my husband was having an affair and would suddenly walk out on his family, leading us to begin the divorce process first. I suspect my husband unintentionally blew the lid off his brother's plan.

I have a divorce lawyer and we are engaging a reputable forensic accountant to valuate the practice. Do I need further protection in this? Is there a chance of me being required to make legal decisions if my brother-in-law has been stealing or committing fraud, or will the accountant be required to blow the whistle on those? I'm neither greedy nor vindictive but I do want to make sure I'm educating myself on what I may be facing as we begin this discovery process.

 

[JDoe]

There's no way to answer that question with the minimal amount of information that you have provided.

Does your spouse have any issues with the arrangement or the money?

Maybe it's your spouse you should be talking to.

We are in the beginning stages of a divorce. My goal was to be concise, and spare everyone from a lengthy telenovela. What additional information would be helpful? I am well out of my realm of knowledge with all of this.

 

[army judge]

I have a divorce lawyer and we are engaging a reputable forensic accountant to valuate the practice. Do I need further protection in this? Is there a chance of me being required to make legal decisions if my brother-in-law has been stealing or committing fraud, or will the accountant be required to blow the whistle on those? I'm neither greedy nor vindictive but I do want to make sure I'm educating myself on what I may be facing as we begin this discovery process.

I suggest you sit back and allow the forensic accounting audit to be completed.
Once you and your lawyer receive the written audit report and analysis, discuss your options, and direct your lawyer to act accordingly.

I suggest you simply sit back, silently, and observe.

Admit nothing, accuse no one, play dumb.

That's my modus operandi, and its allowed be great success over the years.

Develop a blank gaze, appear clueless, let others believe themselves to be smarter than you, and when the time is right, that's when you bust out the low joker, followed by his companion, the high joker!


One step at a time, slow and sure, steady as she goes...

 

[JDoe]

I suggest you sit back and allow the forensic accounting audit to be completed.
Once you and your lawyer receive the written audit report and analysis, discuss your options, and direct your lawyer to act accordingly.

I suggest you simply sit back, silently, and observe.

Admit nothing, accuse no one, play dumb.

That's my modus operandi, and its allowed be great success over the years.

Develop a blank gaze, appear clueless, let others believe themselves to be smarter than you, and when the time is right, that's when you bust out the low joker, followed by his companion, the high joker!


One step at a time, slow and sure, steady as she goes...

I will likely give my deposition next month. Any tips on the playing dumb while being questioned (while giving 100% truth when answering of course)?

 

[army judge]

I will likely give my deposition next month. Any tips on the playing dumb while being questioned (while giving 100% truth when answering of course)?

Always tell the truth.
Your suspicions, as in these peculiar set of circumstances, aren't facts.
If the audit is done by depo time, your lawyer will address that with you.
As far as anything else, you can only tell what you know.
Not too hard, just be genuine, take time responding, which will allow your lawyer time to object to the question.

If you know you tell.
If its unknown to you, simply say, I have no knowledge of that, counselor.