Anchorman

[Snaggletooth]

I've invited a friend of mine, the Anchorman, to join this board and respond. I hope he will join us and become a frequent member. Anchorman is another one of those salt-of-the-earth Tennesseans -- we need more good ol' boys on our board, right?

My question is as follows:

Situation: Client is a government contractor with operations in numerous states. After contracts are over, client shuts down operations.

The various states just go ga-ga after this client for non-reporting. Letters to the various taxing authorities do no good. State revenue departments respond by telling client they are coming after his operations with a padlock and to seize all assets. Some of them even construct tax liabilities with penalties and interest. You call and get telephone menus and if you get a real person, they don't have the authority to close the account.

Let me hear from you folks -- Success stories as to what you do to make them cease and leave your clients alone...Thanks in advance, Ron Jordan

[Anchorman]

Thanks for the invitation

I hope I have got everything set up properly. Been extremely hectic this morning.

[Armando Beaujolais]

I don't know much about how to deal with that multi-state problem, but I'd sure like to welcome Anchorman.

I think you'll find this site useful. It's a bit more free-wheeling than some, and there are a couple of crazy aunts in the basement. But you'll probably get hooked pretty quickly.

Just remember. What happens on this board stays on this board.

[taxmandan]

Other states

IThe various states just go ga-ga after this client for non-reporting.

Let me hear from you folks -- Success stories as to what you do to make them cease and leave your clients alone...Thanks in advance, Ron Jordan

Are you saying the states want subsequent years tax returns, years when the business was not working in their state? If so, about the best way I know of is to file a return with zero income, zero expenses. The computer is expecting a return and that usually takes care it.

When I moved to my present state, I filed a part-year resident return showing the arrival date here. They still sent me a threatening letter asking why I hadn't filed the previous two year state returns! But a letter saying I didn't work here, didn't live here, took care of it.

As for the threats to come after him, I understand that the states are pretty powerless out side of their own borders to enforce collections on taxes. The Attorney General won't pursue it unless it is mega bucks owed. Heck, our state won't even extradite car thieves from neighboring state due to the cost! They could make it impossible for him to ever come back to that state and work though.

Daniel

[Snaggletooth]

..Legitimate Fear

Well stated, TaxManDan. Your last idiom actually poses a legitimate fear - trying to return to these states at some future time and conduct business.

As a military contractor, whose contracts come and go, my client would actually LOVE to win some more business in these old states. We've also tried filing zero returns, but there is always a filing fee, as well as franchise-type information. A zero return also guarantees that they will be expecting another return NEXT year.

Kentucky is a good example -- (and KY is not nearly as aggressive as some of the northeast states). For a lousy $30 filing fee, they want to assess $500 in penalties for the years 2001, 2002, and 2003. To put this in perspective, client won another contract in Kentucky in 2004 and began operating again there. We finally told them to come ahead and padlock the operations at our address.

Funny thing though. They did show up, and the address was at Ft. Campbell. We owned no facility, and no way were these State bureaucrats going to padlock Ft. Campbell!

Client finally settled with the Lexington/Frankfurt cronies for a lousy $30. Only after they found out it was going to make their job more miserable if they didn't settle.

[taxmandan]

Other states

They certainly have gone to extremes in trying to collect what they think is owed to them, trying to balance their budgets I suppose. I don't have any experience beyond that level so can't offer much help, never had a case get that far. Guess the states on the left coast are somewhat more reachable than yours.

Although, I'm arguing with California for a client on alledged taxes owed for 1991. The state can't produce any assessment or other evidence of any tax owed or why they think he owes them anything. Yet they persist in trying to collect and keep posting it as taxes owed on client's credit record, ruining any chance of him getting a mortgage. I've run out of ideas for helping him, CA FTB won't budge on anything, even though it appears that the statute of limitations has run. Last resort could be going to state court in a law suit, but what a costly, time consuming drag!

[JON]

You are filing in the States when you are their????

If your operating in a state to complete a contract, your income or loss for that contract period reports in that state( Ky to Mars). The exception would be if there is some agreement between the states. You are a foreign corporation doing business in that state. If you never file showing the activity you have to hope your home state and that state have an agreement allowing it. Depending on the state there will always be factor formulas or seperate accounting that accounts for the activity and you establish ed "nexus" as soon as you use your employees and/or equipment in that state.

The states love this area now as it is "found" money if they can attribute foreign corporations to making profits in their state and get taxes, penalties and interest.

There are always exceptions, but you need one. The subsequent years if your not there usually filing with the Secretarry of State can remove your active status, but filing no activity forms may become necessary in a lot of cases.

[Black Bart]

Problem Resolution Officer

[QUOTE=Snaggletooth] states go after client for non-reporting....Letters do no good....You call and get telephone menus....if you get a real person, they don't have the authority to close..../QUOTE]

States are such a patchquilt of problems that I haven't ever found a straightforward solution that applies to all situations. It seems to me that states are worse to deal with than the feds. You usually run into incompetence dealing with IRS but I find they generally don't care that much about the money. With the states you have the same incompetence and it's a tougher problem because they're broke and are fanatical about collecting money any which way they can.

Although Arkansas is usually dead-last in everything, we are first in a couple of things. We have a wonderful Problem Resolution Office modeled after the federal Office of the Taxpayer Advocate. The person in charge of it here is an extremely knowledgeable CPA. Phone calls go straight through to her personally--no menus except her answering machine. If she's out she calls back next day. She'll arrange installment plans for those who can't pay in full, abates penalties if justified, is firm but considerate, closes accounts while you're on the phone with her, alway goes the extra mile to assist, etc. I've gotten several matters resolved through her office (solved a case as old as 1992) and don't know what I would have done without her. All that doesn't help you, of course, but I'm suggesting that you inquire as to whether such an office exists in Tennessee. Your state usually has more money than ours, so it's a fair bet they might. If so, you could try to establish a connection with a hopefully helpful somebody that works there and use them from now on.

Trying to remember that other Arkansas number one thing......Wait, wait. I've got it! We were once chosen number one in the nation for unwed pregnancies (Clinton came by his nature honestly). National network newspeople sent crews with satellite dish trucks to interview the superintendent. As I recall, he gave a "no comment" to reporters and a stiffarm to the cameras (everything except wearing hoods).

Heard the one about the office aide who saw Bill wearing a pair of...ahem..."ladies' unmentionables" wrapped around his arm? Worried, he took him aside and asked, "Sir, surely we aren't going through that again, are we?" "No problem," Bill replied. "It's the PATCH!"

[Black Bart]

Anchorman,

Salt-of-the-earth Tennessean, eh? Well; coulda been worse--what if it were salt-of-the-Ozarks? I've got a furriner client from Salty Arabia, myself.

Welcome to the board! By the way, would you happen to have the latest news? Thanks.

Here's a welcome-wagon tip: Ask Snag to fix you up with the Tennessee Tomato (and..ahem...her rich in-laws). Good luck!

P.S. I must, in all good conscience, advise you to take Snag's tax advice with a grain (better make that a shakerful) of your Tennessee earth-salt.

Best regards, BB

[Black Bart]

Offended and disturbed

I'd sure like to welcome Anchorman.

I think you'll find this site useful. It's a bit more free-wheeling than some, and there are a couple of crazy aunts in the basement.

Take that back! My voice is nowhere near that high-pitched!