It is no secret that state budgets are suffering. The lion's share of meeting their budgets are not cutting spending, but first squeeze their revenue departments for as much money as they can get. When it doesn't work, THEN the states look around for corners to cut spending.
The state revenue departments are responding to taxpayers in ways that are less than ethical. I first noticed it in Tennessee, where several clients began receiving assessments 2-3 years ago that were totally fabricated. No area of taxation was above these efforts. Fictitious estimated tax penalties, privilege tax penalties and assessments, corporate tax miscalculations, etc. It can't be simply a matter of making mistakes when 100% of the mistakes are against the taxpayer and in favor of the state. And, of course, each deficiency notice carries the threat of levies. I have spent a great deal of time defraying these errors.
A couple clients have far-flung tax liabilities in other states. I have found that Tennessee is not the only state engaged in this behavior. Here are a few other traits, many of which border on or exceed unethical behavior:
a. Digging up old liabilities (perceived or actual) from prior years, even exceeding the statutes.
b. Curtailing telephone support, in some cases discontinuing.
c. Ignoring correspondence, or electronic communications.
d. Manning their offices with substandard personnel who are not trained in the taxes they administer.
e. Mandating electronic filing on websites which bias the tax liability on a number of issues.
f. Ignoring or not processing refunds.
I would like to hear strategies from the group as to how best to deal with this.
A couple of my strategies:
a. Always OWE taxes. Never overpay. You may never collect the overpayment.
But do not underpay to the extent you will be penalized for estimated taxes.
b. When you can't collect a refund, rather than writing letters or making phone calls,
simply claim the refund as an amount applied from a previous year on the next
return. This is GUARANTEED to get their attention when nothing else will.
Others?
The state revenue departments are responding to taxpayers in ways that are less than ethical. I first noticed it in Tennessee, where several clients began receiving assessments 2-3 years ago that were totally fabricated. No area of taxation was above these efforts. Fictitious estimated tax penalties, privilege tax penalties and assessments, corporate tax miscalculations, etc. It can't be simply a matter of making mistakes when 100% of the mistakes are against the taxpayer and in favor of the state. And, of course, each deficiency notice carries the threat of levies. I have spent a great deal of time defraying these errors.
A couple clients have far-flung tax liabilities in other states. I have found that Tennessee is not the only state engaged in this behavior. Here are a few other traits, many of which border on or exceed unethical behavior:
a. Digging up old liabilities (perceived or actual) from prior years, even exceeding the statutes.
b. Curtailing telephone support, in some cases discontinuing.
c. Ignoring correspondence, or electronic communications.
d. Manning their offices with substandard personnel who are not trained in the taxes they administer.
e. Mandating electronic filing on websites which bias the tax liability on a number of issues.
f. Ignoring or not processing refunds.
I would like to hear strategies from the group as to how best to deal with this.
A couple of my strategies:
a. Always OWE taxes. Never overpay. You may never collect the overpayment.
But do not underpay to the extent you will be penalized for estimated taxes.
b. When you can't collect a refund, rather than writing letters or making phone calls,
simply claim the refund as an amount applied from a previous year on the next
return. This is GUARANTEED to get their attention when nothing else will.
Others?
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