Mass Dept of Revenue - Levy Question

[curiouslegal]

Massachusetts

I recently (last week) noticed that I had a strange withdrawal from my bank account ($500). Called Bank of America and was told to contact the Mass Dept of Rev. I called them, and they said they had a placed a levy on my account due to taxes from 2010.

I live in Atlanta now, and have for the past 5 years. I asked them how they attempted to notify me of any corrections that need to be made, and they said they had mailed a letter to my last known address. In Boston.

I have a lot of issues here -> my tax return was accepted April 18, 2011 by the state. I have updated my address with them NUMEROUS times to reflect my current address yet each time I call they say they don't have it listed.

So, I never received notification for something from 6 year old tax return, and it's legal for them to simply levy an account? Meanwhile, Bank of America charged an additional $125 fee to 'process' the withdrawal. By the way, my 2011 tax return says that I owed them a grand total of $17.

This actually happened to me in 2014, for 2009 taxes. That time they took $1500 from my account, and then when I resent them my 2009 tax return, I heard nothing from them for 6 months, until I received a paper check in the mail for the $1500 from them. No letter or information at all with the check (and obviously no apology or admittance of any error on their part).

I'm feeling pretty frustrated, since I've gone above and beyond to make sure they have my updated information and submitted my taxes every year. Yet, I have no record of anything they've sent me, or any amounts or how they came to their decision. I had luck contacting someone the first time I called them, and I faxed over a copy of my 2010 tax returns. When I called that rep back (numerous times), it goes straight to voicemail (which then disconnects before it allows me to leave a voicemail).

How does this system work? Do they have an agreement with collection agencies and Bank of America to send business their way, so they can collect fees? Is that why it becomes difficult to get in touch with anyone there when there has been a mistake?

I guess I also don't understand what constitutes legal? What is their due diligence requirement to get in touch with someone? (You can simply Google my name and find out my current address.) How long do they have to try to collect on on old tax returns? And what is reasonable? I don't remember very much from a 6 year old tax return. It can't be acceptable for them to say they mailed a letter so they've met their requirement to get in touch with someone.

What falls under harassment? Is that legal? Is the onus always on the tax payer to prove the department of revenue is wrong?

Let me be clear - I believe that everyone should pay their taxes. And I have always filed my taxes. I even use an accountant now because I thought perhaps they don't like Turbotax. This is not rant about unfair taxation, etc., but I am trying to figure out what is actually legit? I'm assuming most people simply pay the amounts if they can afford it rather than deal with the department of revenue but there must be something that can be done.

 

[LdiJ]

Massachusetts

I recently (last week) noticed that I had a strange withdrawal from my bank account ($500). Called Bank of America and was told to contact the Mass Dept of Rev. I called them, and they said they had a placed a levy on my account due to taxes from 2010.

I live in Atlanta now, and have for the past 5 years. I asked them how they attempted to notify me of any corrections that need to be made, and they said they had mailed a letter to my last known address. In Boston.

I have a lot of issues here -> my tax return was accepted April 18, 2011 by the state. I have updated my address with them NUMEROUS times to reflect my current address yet each time I call they say they don't have it listed.

So, I never received notification for something from 6 year old tax return, and it's legal for them to simply levy an account? Meanwhile, Bank of America charged an additional $125 fee to 'process' the withdrawal. By the way, my 2011 tax return says that I owed them a grand total of $17.

This actually happened to me in 2014, for 2009 taxes. That time they took $1500 from my account, and then when I resent them my 2009 tax return, I heard nothing from them for 6 months, until I received a paper check in the mail for the $1500 from them. No letter or information at all with the check (and obviously no apology or admittance of any error on their part).

I'm feeling pretty frustrated, since I've gone above and beyond to make sure they have my updated information and submitted my taxes every year. Yet, I have no record of anything they've sent me, or any amounts or how they came to their decision. I had luck contacting someone the first time I called them, and I faxed over a copy of my 2010 tax returns. When I called that rep back (numerous times), it goes straight to voicemail (which then disconnects before it allows me to leave a voicemail).

How does this system work? Do they have an agreement with collection agencies and Bank of America to send business their way, so they can collect fees? Is that why it becomes difficult to get in touch with anyone there when there has been a mistake?

I guess I also don't understand what constitutes legal? What is their due diligence requirement to get in touch with someone? (You can simply Google my name and find out my current address.) How long do they have to try to collect on on old tax returns? And what is reasonable? I don't remember very much from a 6 year old tax return. It can't be acceptable for them to say they mailed a letter so they've met their requirement to get in touch with someone.

What falls under harassment? Is that legal? Is the onus always on the tax payer to prove the department of revenue is wrong?

Let me be clear - I believe that everyone should pay their taxes. And I have always filed my taxes. I even use an accountant now because I thought perhaps they don't like Turbotax. This is not rant about unfair taxation, etc., but I am trying to figure out what is actually legit? I'm assuming most people simply pay the amounts if they can afford it rather than deal with the department of revenue but there must be something that can be done.

Unfortunately what you have been experiencing is not uncommon. There are many states that will send out letters with unrealistic amounts due on them just to jog someone into proving that they either do not owe any money, or do not owe as much as the letter states. Some people will take the effort to prove them wrong, others will simply pay them, and other, like you, never get the letters and end up with an eventual levy.

I would switch to another bank. First, because this is the second time its happened to you and you want to make it a little more difficult for them to do it again, and second, because the 125.00 processing fee that Bank of American charged is outrageous, in my humble opinion.

Since you have been in touch with someone and did provide a copy of your 2010 return hopefully this will eventually get straightened out, even if you cannot get anyone on the phone right now.

 

[davew128]

I feel the frustration. I once had to deal with a case where DOR was claiming someone owed $500k after interest on a 10 year old return because of "a Mass s-corp difference", a difference I couldn't for the life of me fathom what it could be for the amount of money they were claiming. Neither the firm who had prepared said returns, the client, nor the DOR had copies of said return. The only way to deal with it other than declaring bankruptcy was to borrow money to pay it. Filing a claim for refund after paying it wouldn't have gone anywhere without the ability to prove that the tax assessed was incorrect and the ability to file such a claim was limited a) to one year after the tax is paid and b) one attempt and one attempt only. Without copies of the original return or DOR adjustments, how do you prove what you can't see is wrong?

 

[LdiJ]

I feel the frustration. I once had to deal with a case where DOR was claiming someone owed $500k after interest on a 10 year old return because of "a Mass s-corp difference", a difference I couldn't for the life of me fathom what it could be for the amount of money they were claiming. Neither the firm who had prepared said returns, the client, nor the DOR had copies of said return. The only way to deal with it other than declaring bankruptcy was to borrow money to pay it. Filing a claim for refund after paying it wouldn't have gone anywhere without the ability to prove that the tax assessed was incorrect and the ability to file such a claim was limited a) to one year after the tax is paid and b) one attempt and one attempt only. Without copies of the original return or DOR adjustments, how do you prove what you can't see is wrong?

Last year my state DOR decided to go on a spree of sending letters to people who might possibly be state residents for tax purposes but were claiming residency in another state. They started out sending letters stating that the taxpayers in question owed enormous amounts of money. At least 75% of the people who received letters actually did not owe anything at all which was proven by filing tax returns, and/or with hard documentation to prove it, and none of the other 25% owed anywhere near what the DOR claimed. What I found frustrating is despite receiving hard documentation that people either owed nothing or owed much less than claimed, the DOR still sent most of them a second letter trying to collect a smaller amount of money from them, but still much more than they owed. They did not give up until they got a hard response to the second letter.

Even more frustrating? They decided to expand their program to random taxpayers. They started sending letters to random taxpayers stating that they had reason to believe that the taxpayers had cheated on their taxes (they used more diplomatic language) and that the taxpayers had 14 days to "fess up" and pay what the owed or face serious consequences. That one backfired on them big time as the media got involved and they had to publicly admit to making mistakes and apologize to the public.