After being unemployed for some time in Idaho the high technology taxpayer moved to Colorado in 2003 where he was unable to find employment other than in fast food. In 2004 he was unemployed again. Without early withdrawals from his pension
plan from earnings outside of Coloradoo he would have been homeless. Not being a tax
(and falling apart emotionally after a string of personal
disasters) he failed to include the early withdrawal income
on his federal
online tax returns
picked up on it in 2006 and a relative paid the federal deficiency plus penalties for both years with two check dated the same day. Later the taxpayer found employment in another state and over an extended period paid the Colorado collection
agency the full amount plus penalties for the 2003 Colorado taxes. It is not clear why both years were not included in the Colorado demand. (Or, perhaps they were!) In any case, the collection agency would have known and informed the Department of Revenue
the current address in another state from which the payments were made.
When Colorado belatedly went after the 2004 tax deficiency, the notice was mailed to
the old Colorado address and was not forwarded because USPS address changes are
not forwarded after one year. It is not reasonable to require address changes be updated forever.
Now in 2011 a different collection agency contacted the relative and the relative informed the taxpayer without giving the collection agency his new address. He immediately Department of Revenue office for advice. They obviously passed his new address to the collection agency, which sent a formal demand notice to him. So much for confidentiality!
The total effect smells like a Zombie collection. Apparently the statute of limitations
is being ignored because no amended return
was filed. However, in these instances the Revenue office normally files the return
for the taxpayer. This should have been done at the same time for both tax years
Now in his old age with mandatory retirement
looming and being paid far under market for his skills, he has lost everything - pension, home, wife - everything gone.
What is the best way to proceed now?