How do you stay on top of legal work and/or taxes?
hga: I'm sad to say that after the 1986 tax "reform" bill I just gave up on this sort of thing and became a wage slave.I know from my father that it's a lot of work to keep up on this sort of thing; having an ongoing relationship with a lawyer, retaining an accounting firm, and paying a lot of attention to the issues (back in the bad old days that entailed subscribing to several good newsletters) seems to be safest path.  (Check my account and email me if you want me to put you in touch with him for how he did this for 5 or so decades; you might say that startups are in my blood.)For your case, unless you want to fold the company, it's necessary for you to find out what's going on.  If you made a mistake, just paying off this demand is unlikely to prevent ones in the future.  If you didn't, well, if you can figure that out without spending too much money you then know you have a $3K legal and accounting budget (minus your opportunity costs) to try to set it right.