Predatory State

[jrumbold]

Client lived in Virginia in the 1980's and filed taxes using a paid preparer. Now lives in California. Client received deficiency notice from VA claiming they didn't file for 1988 and 1989 and that they own $150,000 in tax, penalty and interest. Client has since distroyed their records from 20 years ago and so did the paid preparer. Since the statute doesn't begin to toll for a supposed non-filed return, what recourse does a taxpayer have against such a tactic? Apparently Virginia has done this for a lot of taxpayers for filings in the late 80's and there is talk of a class action lawsuit against VA. Are we to now recommend that taxpayers keep their records forever?

[WhiteOleander]

Calif did this same exact thing. One of the preparers here got a letter from CA wanting taxes for 1986. When he called them, they said they no longer had any of the income info, they just showed that he had the unpaid debt.

He had kept a copy of every return he ever filed. He sent them a copy. They had to let him off. But, if the others couldn't "prove" the state wrong, they had to pay.

[BHoffman]

AZ won't stand for it

Ms. Wilcox suffered a load of buckshot in her beehind for tax shenanigans. Among some circles, the man is a folk hero.

Same bunch of county supervisors voted to spend a few million to an out of state artiste' for this crappy ceramic junk that was installed on the sound barrier wall along the freeway. Some smarty pants spray painted a toilet gold and stuck it up there to protest. Freeway drivers have been sabotaging those pesky speed cameras by spraying the lenses with Silly String. I love Arizona.


"Arizonan Guilty of Shooting Politician Over Ballpark Tax
May 05, 1998 in print edition A-16

A homeless man was convicted Monday of shooting and wounding a county supervisor because she supported a tax that helped fund a new baseball stadium.

The defendant, Larry Naman, acted as his own attorney in a bizarre trial that had him urging jurors to deadlock so his case could be heard by another judge.

After three days of deliberation, the Superior Court jury convicted Naman of attempted murder, rejecting a lesser offense. He faces seven to 21 years in prison.

Supervisor Mary Rose Wilcox, who testified during the trial, suffered no permanent injury when she was shot in the pelvis as she left a Board of Supervisors meeting Aug. 13. Naman was arrested at the scene.

Naman, 50, said Wilcox was just one of the people he wanted to shoot over the tax that helped build Bank One Ballpark. The tax was passed without the approval of voters.

But Judge Michael O. Wilkinson prevented Naman from using the tax as his defense.

Naman alluded to the tax repeatedly in his opening and closing statements and when he called himself to the stand. “Violence was justified in this case,” he said. “I became very convinced of that.”"

[erchess]

I have always advised clients

that the safest course of action was to keep every tax return and every supporting document until the estate(s) for the taxpayer and the spouse if any are settled and that the next safest course of action was to keep only the returns but discard after ten years the supporting documents except those relating to assets they still have. I know that this has never been the standard advice but it has been my advice.

[taxmandan]

States are desperate

I also tell clients to keep their returns and records forever, especially if they have a business or rental properties or 1031 exchange.

Oregon did that a couple of years ago. Looking for returns from 14 years earlier. DOR insisted they weren't on a fishing expedition but for some reason claimed that no returns had been filed and tax was due. Don't know what the clients did about it, they didn't retain my services.

Another client was denied a mortgage on home purchase in 2006 because California said he owed back taxes for 1990. It was on his credit report. He moved to Oregon in '89 and of course has no records from back then but swore he didn't owe anything.

Daniel