State of Virginia has robbed me.

[mfleshman]

The following is my communication in my case with the VA Dept. of Taxation (DoT):

I will start be reacquainting you with my case. In the Summer of 2002, I was garnished for a over $3,000 for the tax year 1994. The amount assessed and garnished was computed with the assumption that no state taxes were withheld throughout the year for the only time in my life and in my history as a wage earner in the state of VA. Additionally, this assessment assumed that 1994 would have been the only year that I ever owed more taxes than what was withheld, but also the only time that I was not due a refund.

My initial efforts to resolve this matter and to get my money back that the state stole without due process or rational logic were met with rude and programmed responses that always ended with "you need to pay your taxes". I explained then that I have paid my taxes and it is nothing short of theft to take those monies from me a second time. I was told the burden of proof was on me, even though the garnishment was beyond the period that employers are required to those records, beyond the period that the DoT recommends that individuals maintain such records, beyond the period that the IRS maintained the hard copies and beyond the data collected and maintained by the Social Security Administration.

So after fruitless efforts to locate copies of my W-2 for 1994, I contacted state legislators. With the following letter:

[LETTER #1]

In a matter of days, you contacted me and seemed genuinely interested in resolving this. You said you would look at my tax paying history to verify that I have always had state taxes withheld by my employer and once your research was complete that I should receive a check. However, instead of check you sent the following letter to me on April 16, 2003:

This is in response to our phone conversation yesterday, April 15, 2003 concerning your 1994 VA income tax assessment.

When I spoke with you, you told me that you had filed VA income tax returns for 1992 and 1993 and that your place of employment was Gilbert Robinson, Incorporated. I told you that we would take those years that followed and make a determination on whether you owed. In researching our files I was unable to find returns for 1992, 1993, 1995 and 1996, therefore the assessment for 1994 must remain as assessed and paid. If you can provide us with a copy of your Wage and Earnings Statement or the information on letterhead, we can adjust the bill or abate it entirely. I must reiterate, that the Internal Revenue Service will not have what you need for 1994.

[2 yr. limit to contest]

The dept made every effort to give you an opportunity to pay your 1994 bill or to make arrangements to pay. We sent a letter informing you that an assessment would be made for 1994, unless you provided us with the correct information. We mailed consolidated bill statements. We mailed letters informing you that your refunds for 1998, 1999, 2000 and 2001 were going to be applied to 1994. We issued two liens at your place of employment, your account was assigned to a collection agency, and on April 10, 2001, we sent you a letter requesting a return for 1998, you filed that return and subsequent returns.

[Contact information]

In your own words, I have complied with every other notice or lien with regard to any other tax year. In fact, I have hired a professional accountant over last several years to try to figure out what you do and do not have. In all cases, I have had state withholdings exceeding my tax liability. Yet, you insist to assess me for 1994 as though that was the one time in my life that no state taxes were withheld and overpaid. The frosting on the cake is that you even acknowledge that even the IRS will not have what I need to prove my argument.

In 1992, I was a full-time college student at VCU until graduating that August. I was transferred to Feyetteville, NC in December 1994 and was licensed, insured and everything else imaginable as a NC resident through September 1995. While living in NC, I completed my fed and VA state taxes for 1994 electronically using the same software suite.

[rant about effects]

I can find nothing in Constitution, US Code or VA Code that justifies the DoT suspending my rights. This isn't a tax assessment; it is a theft. I am not a lawyer and I suspect our state tax actions are immune to any statute of limitations, but we all know a jury of my peers would see this evidence and call this an abuse.

[rant about logic]

Additionally, how can you conscionably tell me that I have to prove my case when your action was taken beyond the time that your dept tells people on it's website to retain their tax records. In fact, you even acknowledge the IRS doesn't even have the information. Employers aren't required to maintain the records for the duration that I would have needed to be able to dispute your assessment.

Ms. Forehand, I realize that you do not make the rules. But by your letter to me, it is clear that you had room for judgment. If I or my accountant had received the letters that you described in reference to 1994 taxes, does it make sense that we would have dealt with the other years you admitted but not 1994?

I am asking you to reevaluate this. I am also sending this letter to persons of influence in the state of VA because there is no telling how many people have paid their share of taxes twice. If this cannot be resolved through your channels, then it will be my life's ambition to see your dept reformed to respect the Constitution and the rights of the taxpayers. The actions of your dept has caused great harm to me and my family and that is not the purpose of government. I paid my taxes for 1994 in 1994 just as I have in every other year. What you assessed and garnished was stealing. Maybe our laws need to reconcile that the burden of proof should be on you to prove those taxes were not withheld since your dept seems unrestricted in the number of years you can go back.

I will conclude with a quote from the FAQ section of your website:
How long am I required to keep my state tax returns?

You should keep your tax records for at least 3 years from the due date of the return or the date the return was filed, whichever is later. If the IRS requires you to keep your fed records for a longer period, keep your state records for the same period of time.

The following is the response from VA's Tax Commissioner:

...

In attempting to resolve income tax liabilities when no W-2 information is available, the Dept makes every effort to determine whether any VA income tax was withheld from an individual's wages. In the ansence of documentation, we can usually make a determination based on returns filed for the taxable years before and after the year for which the assessment has been issued. As explained, in Mrs. Forehand's letter of April 16, 2003, we were not able to make an estimate of your 1994 VA withholdings because our records did not reflect receipt of VA income tax returns for 1992, 1993, 1995 and 1996. As a result, we find no basis for reducing your 1994 assessment.

Our records show that the assessment was paid in full on March 20, 2003.

He clearly didn't read anything I had written. Also note that in making "every effort" they didn't bother checking the employer filings for that year. I need help.

 

[Michael Wechsler]

This is a lot to read but I did read something about 2 years to contest the validity of the assessment. Let me ask you this -- what took 10 years to raise the issue? Additionally, if you didn't file taxes, might you be asking for more trouble than it's worth with potentially being assessed penalties?

I can understand your frustration but what took so long? I'm sure there are recent issues that are higher on their priority list.

Originally posted by mfleshman
The following is my communication in my case with the VA Dept. of Taxation (DoT):

I will start be reacquainting you with my case. In the Summer of 2002, I was garnished for a over $3,000 for the tax year 1994. The amount assessed and garnished was computed with the assumption that no state taxes were withheld throughout the year for the only time in my life and in my history as a wage earner in the state of VA. Additionally, this assessment assumed that 1994 would have been the only year that I ever owed more taxes than what was withheld, but also the only time that I was not due a refund.

My initial efforts to resolve this matter and to get my money back that the state stole without due process or rational logic were met with rude and programmed responses that always ended with "you need to pay your taxes". I explained then that I have paid my taxes and it is nothing short of theft to take those monies from me a second time. I was told the burden of proof was on me, even though the garnishment was beyond the period that employers are required to those records, beyond the period that the DoT recommends that individuals maintain such records, beyond the period that the IRS maintained the hard copies and beyond the data collected and maintained by the Social Security Administration.

So after fruitless efforts to locate copies of my W-2 for 1994, I contacted state legislators. With the following letter:

[LETTER #1]

In a matter of days, you contacted me and seemed genuinely interested in resolving this. You said you would look at my tax paying history to verify that I have always had state taxes withheld by my employer and once your research was complete that I should receive a check. However, instead of check you sent the following letter to me on April 16, 2003:



In your own words, I have complied with every other notice or lien with regard to any other tax year. In fact, I have hired a professional accountant over last several years to try to figure out what you do and do not have. In all cases, I have had state withholdings exceeding my tax liability. Yet, you insist to assess me for 1994 as though that was the one time in my life that no state taxes were withheld and overpaid. The frosting on the cake is that you even acknowledge that even the IRS will not have what I need to prove my argument.

In 1992, I was a full-time college student at VCU until graduating that August. I was transferred to Feyetteville, NC in December 1994 and was licensed, insured and everything else imaginable as a NC resident through September 1995. While living in NC, I completed my fed and VA state taxes for 1994 electronically using the same software suite.

[rant about effects]

I can find nothing in Constitution, US Code or VA Code that justifies the DoT suspending my rights. This isn't a tax assessment; it is a theft. I am not a lawyer and I suspect our state tax actions are immune to any statute of limitations, but we all know a jury of my peers would see this evidence and call this an abuse.

[rant about logic]

Additionally, how can you conscionably tell me that I have to prove my case when your action was taken beyond the time that your dept tells people on it's website to retain their tax records. In fact, you even acknowledge the IRS doesn't even have the information. Employers aren't required to maintain the records for the duration that I would have needed to be able to dispute your assessment.

Ms. Forehand, I realize that you do not make the rules. But by your letter to me, it is clear that you had room for judgment. If I or my accountant had received the letters that you described in reference to 1994 taxes, does it make sense that we would have dealt with the other years you admitted but not 1994?

I am asking you to reevaluate this. I am also sending this letter to persons of influence in the state of VA because there is no telling how many people have paid their share of taxes twice. If this cannot be resolved through your channels, then it will be my life's ambition to see your dept reformed to respect the Constitution and the rights of the taxpayers. The actions of your dept has caused great harm to me and my family and that is not the purpose of government. I paid my taxes for 1994 in 1994 just as I have in every other year. What you assessed and garnished was stealing. Maybe our laws need to reconcile that the burden of proof should be on you to prove those taxes were not withheld since your dept seems unrestricted in the number of years you can go back.

I will conclude with a quote from the FAQ section of your website:
How long am I required to keep my state tax returns?



The following is the response from VA's Tax Commissioner:


He clearly didn't read anything I had written. Also note that in making "every effort" they didn't bother checking the employer filings for that year. I need help.

 

[mfleshman]

Re: Re: State of Virginia has robbed me.

The assessment wasn't brought to my attention until the Summer of 2002 when my wages were garnished. As evidenced by the letter department's representative, my CPA had resolved all known state tax issues in 2001. We were completely blindsided and surprised by the 1994 garnishment for 1994's assessment.

Anyhow, a new drug has returned some of my Alzheimer afflicted mother's capabilities and we have located the copy of my second W-2 for 1994 that we requested in the Fall of 1995 when the state requested another copy then to match with the electronic filing I had completed for the year. Additionally, we found the receipt for the software package purchased in April 1995 for state filing. Evidently, the state never did match the documents with the file and ultimately treated the filing as null and void then assessed as never filed. At this time, I have faxed my W-2 and another completed state tax form for 1994 and expect my twice paid taxes to be refunded appropriately. I have been vindicated, but still curious to see how else the tax people will try to keep the money they stole from me.

Originally posted by thelawprofessor
This is a lot to read but I did read something about 2 years to contest the validity of the assessment. Let me ask you this -- what took 10 years to raise the issue? Additionally, if you didn't file taxes, might you be asking for more trouble than it's worth with potentially being assessed penalties?

I can understand your frustration but what took so long? I'm sure there are recent issues that are higher on their priority list.

 

[Michael Wechsler]

Re: Re: Re: State of Virginia has robbed me.

I'm really sorry to hear this. It's rather amazing that they waited this long. I'm just wondering, did you file tax returns during the 90s or choose not to since you did not owe taxes? It seems that the IRS had almost nothing on file and I wonder why that is the case. If you filed, this would probably be a field day for the press.

Originally posted by mfleshman
The assessment wasn't brought to my attention until the Summer of 2002 when my wages were garnished. As evidenced by the letter department's representative, my CPA had resolved all known state tax issues in 2001. We were completely blindsided and surprised by the 1994 garnishment for 1994's assessment.

Anyhow, a new drug has returned some of my Alzheimer afflicted mother's capabilities and we have located the copy of my second W-2 for 1994 that we requested in the Fall of 1995 when the state requested another copy then to match with the electronic filing I had completed for the year. Additionally, we found the receipt for the software package purchased in April 1995 for state filing. Evidently, the state never did match the documents with the file and ultimately treated the filing as null and void then assessed as never filed. At this time, I have faxed my W-2 and another completed state tax form for 1994 and expect my twice paid taxes to be refunded appropriately. I have been vindicated, but still curious to see how else the tax people will try to keep the money they stole from me.

 

[mfleshman]

Re: Re: Re: Re: State of Virginia has robbed me.

I do not know why the IRS did not have a copy of my W-2 for 1994, but I am guessing that it is somehow a consequence of filing electronically before the IRS was ready for what was relatively new technology in 1995. In fact, I even paid the $36 for the IRS to send me a copy and received printed output that was pertinent to federal withholdings only and a response that the information I had requested was not available. On the bright side, the IRS did manage that filing in April 1995 as on time and never discarded it as the state must have done.

Ironically, 1994 was one of the years that I had filed on time. Because I have always had paid my taxes through withholdings to the extent that I would ultimately be due a return at the end of the year of less than $300, I had on a few occassions not filed my state taxes at the end of the year figuring that time, interest and penalties were irrelevant since I would be able to file at any time and be due a return and owe nothing. In all cases where it was my fault that I had not filed on time, the state was quick to sieze the matter and force me to file within a two three year period wherein I was due small refunds and not subject to penalties or interest. I was not prepared for such an eventuality for 1994 because I knew I had filed it on time and so many years had passed.

The most troubling aspect of this adventure to me is that it highlights how our tax laws are such that there is an assumption of guilt on the taxpayer and the burden of proof rests entirely on the taxpayer. Some where along the line, our legislators have forgotten that taxpayers are the the same citizens of this republic who are supposed to be protected by our Constitution. The founding fathers surely never intended for our protection of property and civil rights to be suspended in the event that an income tax be established by our states and federal governments. All through this ordeal, I would have preferred to have been charged along with my employer for 1994 for tax evasion so that the buren of proof would have been shifted back to where it belonged and the common sense of a jury would have prevailed over the insane rules and processes of a governmental department.

Presently, I am waiting for a series of six checks to fully refund the money siezed from me by the state and determined interest. While I am happy to be getting my money back, I still feel violated and fearful of a government that is neither apologetic nor seemingly aware of just how terribly they were trampling on my Constitutional rights. In all the years and following all of the letters on my behalf, the department never looked at what my employer had reported as withheld and paid during 1994 even though they were in possession of that information the entire time. By the time I found the evidence, maintained by mother for nine years, the department of taxation had still not decided whether it was going to review my employer reporting to them per my request via FOIA. In "reviewing the matter thoroughly" as the state Governor had been assured was done by the department, I am baffled why they didn't feel obligated to view what the employer had reported on their own since they knew that was the only source of evidence either way short of the taxpayer maintaining records far beyond the three years that the department reccommends on their web site.

This is scary stuff and anyone reading this needs to know that if my mother had not maintained records for nine years, the outcome would still be up in the air and decided entirely by the department of taxation.

Originally posted by thelawprofessor
I'm really sorry to hear this. It's rather amazing that they waited this long. I'm just wondering, did you file tax returns during the 90s or choose not to since you did not owe taxes? It seems that the IRS had almost nothing on file and I wonder why that is the case. If you filed, this would probably be a field day for the press.

 

[IAmCat]

Well at least I know that I am not the only one. I have been combing law sites for weeks trying to find some way out of my mess.

I haven't filed any taxes for many years. I guess everyone knows that if you don't file Federal, that they file it for you and keep any refund. Not so with State taxes. Oh, not so.

You, mfleshman, did nothing wrong at all. And the State Vampires got you anyway. I made the mistake of giving money to the Vampires. Now they say that I paid nothing. As you said, although they receive withholding payments from employers, complete with a copy of the information provided on each employee's W-2, they disregard (and I guess, promptly discard) this information.

In a recent letter to the Undead, I wrote: "even though we had the tax withheld from our earnings and remitted via our employers to the Commissioner, that the State considers a taxpayer to be "guilty until proven innocent". Although we do not agree with this practice and consider it to be in violation of the Bill of Rights of the Constitution of Virginia, we are trying to be cooperative. I know of no other entity, public or private, that claims to keep no sustaining record of payments received. "

My next step was the FOIA. Am I going to get anywhere?
I have also been told that the Social Security Administration has about ten years worth of W-2's. Of course they charge you $30/year to get them. That will only cost me $300 compared to the $4000 they say I owe.

So far, as long as I keep the letters going to and coming back from DoT, they are keeping the wolves at bay. A guy at the collection agency fro DoT actually said to me that the State can not only garnish 100% of your wages, but can sieze ALL of your property. They have no restrictions. Great. Something to look forward to. I had better start looking for a comfy cardboard box for my family to live in.