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Zip Taxes
Zip Taxes, Tax Preparer
Category: Tax
Satisfied Customers: 156
Experience:  CTEC Licensed / Mgmt Experience with H & R Block... Self Employed since 1986 Experienced in all Scheds
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New York state put a tax lien on my home. When the home was

Resolved Question:

New York state put a tax lien on my home. When the home was sold they collected on the lien. It turns out that no taxes were actually owed and that I suffered a capital loss. How do I go about recouping the money they incorrectly took?
Submitted: 3 years ago.
Category: Tax
Expert:  Zip Taxes replied 3 years ago.

Zip Taxes :

Welcome to Just Answers, I will do my best to Answer your Question.

Zip Taxes :

You must prove (you have the burden of proof) that you didn't owe the money or the money was paid. You must contact the agency that liened the property. Give them a certified letter of notice of the issue. They have to listen to you providing not too much time has passed... But clearly, how ever proof you have, cancelled checks, processed tax returns, how ever you have it documented, get them on the phone and find out how to remedy the issue. If you have to file a claim against them, find out the who and where and the proper form to file.

Zip Taxes :

When dealing with a governmental agency, it can get dicey and you want to be very clear as to their instructions.

Zip Taxes :

Please let me know if you need further assistance.

Customer:

NYS Department of Taxation-Tax Compliance filed the lien on October 27, 2004 for taxes owed for 1998 and 1999 in the amount of $81,732.21. The IRS also filed a lien on February 9, 2006 in the amount of $625,249.00. After filing the federal returns the IRS released the lien as there were no capital gains. At that time we believed that NYS had also released the lien because of information provided to us by a representative of the Tax Advocate Service, however, this information was not in writing and we have no proof of it. When we closed on the property on August 21, 2007 the sale price was to be $922,000.00 but due to an accounting error on the part of the seller's attorney that went unrecognized by our attorney until August 23, 2007 we were still owed $20,570.75. All monies remained in escrow through a lengthy legal battle which we won in 2008. At that time NYS took there money off the top and the rest of the money was released.

Customer:

When I send the certified letter to NYS Department of Taxation should I include all of the documentation at that time or just the letter stating this information and was for instructions as to where to send the paperwork?

Zip Taxes :

I would send all of the copied documentation.

Zip Taxes :

If you have an attorney, you should "CC" your attorney "just for the record" of the isse

Zip Taxes :

issue

Zip Taxes :

Also note on the bottom of your letter that you are CC the information to the attorney so they know "other" people will be involved.

Zip Taxes :

Hang in there for one min... I want to re-read your statement

Customer:

Okay, thank you for your help I will do so. Do you know the statute of limitations since the 1998 and 1999 state returns were apparently never filed?

Zip Taxes :

Well the statues do vary from state to state and the IRS as well, but usually when it comes to the state or IRS collecting on back taxes, there is no statute, but when it comes the them owing us money, it's 3 years

Zip Taxes :

furthermore

Zip Taxes :

But, if they taken money that shouldn't have, then sometimes the statute doesn't began until you discovered the error

Zip Taxes :

still reading..................

Zip Taxes :

Did you file the State along with the Federal back in 2006 or when the IRS release their lien?

Customer:

NO

Zip Taxes :

Ok...

Customer:

The tax advocate advisor said "Well NYS should release you of all liens now as well" when the IRS released the lien. However, she failed to explain that we had to go through the same process with NYS. I know we should have realized but we were ignorant and just relieved.

Zip Taxes :

The state, in my opinion needs to be filed along with the Fed. If nothing was filed with the state unless an amendment is needed

Customer:

I also just found out that that money could have ever been recouped. I thought once they took it in that manner, that was that.

Zip Taxes :

I think, you need to file the state, but also provide the Federal Release and any additional paperwork to support your issue.

Customer:

Ok. I have all of that information and I will contact my attorney to walk us through this. I was hoping to avoid the legal fees that will greatly reduce any reimbursement but hopefully it will ensure a better chance at getting anything back.

Customer:

Thank you for your help at least I have a jumping off point now. I will include a tip with payment.

Zip Taxes :

true... so true

Zip Taxes :

thank you so much

Zip Taxes :

i wish the very best

Zip Taxes, Tax Preparer
Category: Tax
Satisfied Customers: 156
Experience: CTEC Licensed / Mgmt Experience with H & R Block... Self Employed since 1986 Experienced in all Scheds
Zip Taxes and 2 other Tax Specialists are ready to help you

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