NYS Dept of Tax and Motor Vehicle Purchase

[richardf3]

Six months ago I purchased a vehicle which was in rough shape and was priced low to begin with. The gentleman was in a bind and I offered him $5,000 which was $2,000 less than he wanted.

He took the offer and I borrowed the cash from my father to buy it. Now, NYS Dept of T&F has billed me for the difference in Bluebook value which is $12,000. They say I need a receipt showing I bought it for $5,000 which to me was the bill of sale NYS already has which of course was signed by both of us.

I sent them a letter explaining why I got the car so cheap but now they are claiming he told them he sold it for $11,000. I immediately asked for proof of this but was told I am not entitled to such proof. I asked to speak to her supervisor and she seemed a bit perturbed by this. I have to call back tomorrow as he is not in today.

It seems to me that the seller would be perjuring himself by signing a document stating the sales price was $5,000 then telling NYS it was $11,000. I have no clue why he would do this to being with.

My company just cut everyone's hours and this could not have come at a worse time. Is there any suggestion as to the path to take?What is the name of your state (only U.S. law)?

[You Are Guilty]

You basically have to prove your "real" sale price was $5k (and not $7k or $11k or any other amount). The Tax Dept thinks you're trying to pull a scam.

To prove your sale price, ideally, you need a notarized affidavit from the seller stating the purchase price. Since the seller appears to be the source of your current problems, we can pretty safely assume you won't be able to get one.

Barring that, there is no "sure thing". A signed bill of sale along with any proof of the car's mechanical shape (repair bills, etc) is the next best bet. Last ditch effort is to submit a sworn affidavit on your own behalf along with the paperwork showing your $5k loan used to buy the car (you do have a signed loan agreement, right?) and hope they accept it as "true". In my experience however, they probably will not.

In which case you can also do your own research to see what the actual blue book value for the car was at the time of purchase. My guess it'll be lower than $11k. Use your research to negotiate a lower number.

PS: You did pay tax on the $5k sale price, right? If so, you are entitled to a set off of the tax you paid on that first $5k for anything over that amount imposed by the Tax Dept. In other words, if they go with the $11k figure, you would only have to pay tax on $6k, the difference between $11k and the $5k you already paid.