Attempt by State of XX (not ORegon) to extort taxes from OR resident/business owner

[Zigner]

It wouldn't hurt but it proves nothing other than he has been registered in OR for 35 years. It doesn't disprove that he hasn't been doing business in CA.

Gotta watch the double (or triple) negatives

 

[Oregon-resident]

No, that alone will not do it. Showing where your business is registered tells the state nothing about where you actually performed the work and derived the income you had from the business. Microsoft is organized in Washington but does business nationwide. It is subject to tax in California because it does business in California even though it is organized in Washington.

So basically I'm guilty until I prove myself innocent! If I don't pay my taxes to Oregon, Oregon would have confiscated my home by now.

 

[PayrollHRGuy]

Yet evil California has taken no such action. So, no you aren't guilty of anything. CA has data that you may have earned money in CA. They are asking you to show that you to explain that you didn't.


Zinger you are right about multi negatives. That even hurts my head trying to fix it.

 

[Oregon-resident]

Yet evil California has taken no such action. So, no you aren't guilty of anything. CA has data that you may have earned money in CA. They are asking you to show that you to explain that you didn't.


Zinger you are right about multi negatives. That even hurts my head trying to fix it.

Thanks, All, for the help.

 

[Stephen1]

Reminds me of my experience when another state wanted money from me. Decades ago I was on active duty and lived in Virginia. My only income was my active duty pay but my wife did work in Virginia. We paid Virginia income taxes on my wife's Virginia income. Nine years later I was contacted by a collection company wanting back taxes for the 3 years I had lived in Virginia. Apparently the state of VA had compared their tax rolls to who had filed federal taxes and had a VA address. I informed the collection company that I had been on active duty, my home of record was not Virginia, and so in accordance with the Soldiers and Sailors Civil Relief Act I didn't owe Virginia taxes. I've heard nothing since.

To me, your case sounds similar. I would say that California matched up the 1099s issued by CA companies to who paid CA income taxes. When there is a disconnect they send a letter. This is one way to find companies/individuals trying to avoid paying taxes.

 

[Taxing Matters]

So basically I'm guilty until I prove myself innocent! If I don't pay my taxes to Oregon, Oregon would have confiscated my home by now.

This isn't a criminal proceeding, so guilt and innocence are not involved here. The state has a 1099 issued to you from a California payor. That is enough to suggest to the state that you MIGHT have done work in California and thus would be subject to tax in that state. Thus, it is not unreasonable for the state to contact you and ask you for information what the deal was and, if you say you aren't resident in CA and didn't work there, it is not unreasonable for the state to ask for documentation to prove it. After all, states lose a fair bit of revenue from people working in their state and not reporting it. Given the budget situations of many states, and notably California, it is not suprising that they chase down all the dollars they can, including going after those nonresidents that owe them tax. Nothing about this is illegal or violates any of your rights. You seem incensed that the state is doing this, and I’m not seeing the reason for the indignation. Sure, it’s annoying to deal with it — I've never had a client say it was fun responding to tax agency inquiries. But it is part of modern life. At least in the U.S. you get the chance to contest this before the tax agency says you owe and starts taking assets to collect. In a lot of other countries they say you owe it first, collect it, and then after that they might give you some right to appeal the decision later.