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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4670
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I have been going round and round with the State of Ohio's

Customer Question

I have been going round and round with the State of Ohio's Attorney General. They contacted me two years ago wanting payment for unfiled taxes for the years 2001, 2004, 2005, 2006. Plus the interest accrued on arbitrary amounts of income. The totals came to nearly $19000.
However, I had filed those years, and every year since I began working as a minor. In fact, I'm almost positive I received returns for each of those years. But I cannot prove that I filed, accept for the year 2001, because I no longer have the paperwork. I do however have each and every w-2 and source of income stating that taxes were indeed paid. The state's website also says it's not necessary to save filings beyond four years. Though I do save for 7.
At the same time, the state also placed four liens against my credit, and contacted collection agencies to begin demanding the payments. I contested the allegations in the time parameters, and they wanted proof of my filing anyway. I subsequently hired a tax la firm to handle the matter, and they suggested I refile the years in question proving I didn't owe monies to begin with, and have the state adjust accordingly.
As the adjustments were made, it became very clear that I didn't owe anything on three of the years, and owed a few hundred on the fourth. We were then ready to pay the small amount due, (though I still didn't think we should be paying anything), when the collection company's representative, LOST all of the paperwork, case filings, and suddenly didn't remember ANY of what we had all agreed upon to this point. Unbelievable. To our amazement, we had to start the entire process over again, because after weeks of going back and forth to jog his memory, and letting him "search" for the mountains of paperwork, he still insisted none of us had ever begun the process to begin with.
My tax attorneys were furious. Not only had they been paid to do me a service, which was lengthy, now they had to do it again. So, we resubmitted the EXACT same paperwork to this representative again, and now the totals are coming out completely different, and I owe more money now.
So, in the last three years, my credit has been ruined, and I pay higher interest on every loan I submit to. I have paid a tax law firm thousands of dollars, have had to resubmit filings from more than a decade ago, had those lost, had to submit for a third time the years in question, and, have to deal with an obviously overworked, or, incompetent individual whose poor work has caused me tons of money, good credit, time, reputation, and health issues over this case.
I have contacted the state directly, and they say I have to work with him, and wont help me any further.
I have always paid my taxes, and always will. It is very important to our public servants, cities, states, and country to do our part in this manner. I always volunteer with local services, and often work with charities. If I owe money, I will certainly pay. But this entire thing seems quite shady and odd. How could one protect one's self from this happening down anyone's road of there is no time limit to which the state can ask for proof of filing if their OWN website says you don't have to keep records after 4 years. AND, the one person I'm allowed to deal with, that controls something so critical to my family's well being cannot give me concrete results for anything thus far.
Can anyone help me? I will pay someone to help me make this just go away. Do I have a case at all?
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax. I will assist.

Customer: replied 1 year ago.
Expert:  PDtax replied 1 year ago.

There are settlement options you did not mention. One might work, the other definitely will. Your situation will drive which is best.

Ohio has an offer in compromise program that would allow you to offer a nominal settlement. You could use an alternative argument I use when filling a federal offer, "effective tax administration".

If that doesn't work, and your situation allows, once the old tax debts have aged 240 days, they can likely be discharged by a bankruptcy court. Without any more dealing with Ohio.

Expert:  PDtax replied 1 year ago.

Since you have tax pros on this already, consider asking about these options to settle things for good.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

Customer: replied 1 year ago.
I don't understand either of your suggestions. I don't want a bankruptcy on my credit. And I still don't know why they can ask so many years later for an unjustified inquiry. I don't think I should be "compromising" for anything, and they have done a great job at ruining my credit with something completely unjustified. And the "old tax debts" are far more than 240 days old.So I am sorry but I am not looking to settle. I am looking to possibly sue the state honestly. Why can the state, out of the blue, ask for proof of filing for anyone, so outdated, place liens, and employ someone who can directly destroy a family's life?What if a state asked you for your filings from 20 yrs ago, with a total of money owed, plus interest, and placed liens on you unless you paid? Just curious.What recourse do I have against the state?
Customer: replied 1 year ago.
Isn't there a statute of limitation? Why does their own site say you can throw away your filings after 4yrs?
Customer: replied 1 year ago.
I seriously need more advice than what you suggested.
Expert:  PDtax replied 1 year ago.

You asked what to do. I offered two suggestions, both of which will fix your problem. Your take on your problem will not allow you to fix it, only continue to fight it. A big, expensive difference.

Settling a dispute does not address ask the disagreement points, just reached a resolution. Until you can appreciate that, my recommendations will not make sense. They will fix your problem, but you can't get there from here.

I will offer an analogy. A divorce I wadd involved in years ago concerned a client who has a number of issues with his estranged wife. He wanted each addressed in the negotiations. But the attorney have great advice that I think is appropriate:

Expert:  PDtax replied 1 year ago.

He said "You are in a bad spot here. I'm going to get you out."

He did not really care about each issue, or arguing each point, only the end result. Which was my advice to you about your state taxes.

If you can appreciate this advice, please consider it. Only the attorneys who are getting $200 an hour or more to do it your way will do it your way, and they aren't getting it done. Which is the goal.

Thanks for allowing me the chance to offer the best advice I can give. My firm does this work regularly, and we typically use compromises and bankruptcies, uncollectible negotiations, expiration of statutes, and other techniques to make a deal. Note none of those require the correctness of the tax liabilities. If you must do it that way, you will likely need to litigate. At high cost.

Positive feedback is requested. I'm PDtax.

Expert:  PDtax replied 1 year ago.

I just got the email about your last question regarding statute of limitations. There are several. And these questions should have been addressed by your tax pros.

The amount of time you can typically amend a form 1040 to get a refund is three years. The time IRS has to audit that return is three years. I believe Ohio has four years to audit. Not to collect.

IRS has ten years to collect once a return is filed and a tax assessed That is a different statute. Ohio is still collecting taxes it believes are due. States have their own collection statutes. I didn't check, but it could be as many as 20 years.