Can the IRS demand payment of taxes from me personally for a California S-Corp I dissolved in 2009?

As signatory of the bank accounts or as an officer (i.e., president) of the dissolved entity you may be held as a "responsible party" and thus be liable for taxes owed by the corporation. They hold you to be personally liable and can go after your assets and/or accounts. The fact that the entity is dissolved does not relieve you from liability. If there are any other responsible parties, the Service can also go after them. Please click “thumbs up” if you’ve found this helpful and/or informative. DISCLAIMER & IRS Circular 230 DISCLOSURE: The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt. IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

There are not enough facts here to answer your liability question. While as a general rule, an S Corporation does not owe or pay taxes because the income is passed through to the shareholders, there are exceptions for every rule. It is likely the IRS deems you liable because you were an officer of the entity. That said, if the IRS has assessed a tax deficiency for which you are determined to be liable, they can levy your paychecks and/or your bank account. However, the IRS cannot take this action without written notice to you. Usually the taxpayer will receive a series of notices. A "Final Notice of Intent to Levy and Notice of Your Right to A Hearing" is sent at least 30 days before the IRS begins to exercise a levy. If the IRS has notified you they believe you are liable, now is probably a good time to seek out a tax attorney rather than to waiting for further IRS action. A tax bill of $878 (plus interest, plus penalties) from 2007 is going to add up quickly. The IRS has ten years from the date the return was filed to attempt to collect the past due taxes. If this tax return was filed on time, that date is likely around March 15, 2018. If you are personally liable, you have several options available – at this point – for how to handle your tax case. You can learn more about some of your options on the IRS website and in the IRS publication below. Hope this helps. If you think this post is helpful, please click on the thumbs up button below and/or designate my answer as best answer. LEGAL DISCLAIMER I am licensed to practice law in CA & TX, and my office is located in San Diego, CA. I am providing this response for your general information. This response is not legal advice, nor is it intended to be. You should consult an attorney for advice regarding your individual situation. I invite you to contact Rábago Law. However, communication through this website does not create an attorney-client relationship and is not protected by the attorney-client confidentiality rules.