Do I have to Pay or not and can I be sued?

[Ginger Girl]

I was married and in August of 1999 and live in Mississippi. Later that year a friend of my husband’s family helped me in my home with some interior decorating. In association to this she allowed me to buy some decorations for my home through some wholesale connections that she had. At the time of purchase, I paid the wholesale price and she never mentioned any tax. I also tried to pay her for the decorating at the time she did it and she refused to accept any money. Unfortunately my husband and I divorced in October of 2000. It seems to have affected her memory.

In January of 2001 this lady sent me a letter that stated she was now doing her tax and discovered that she would have to pay sales tax on the items that she allowed me to purchase and was now also going to charge me for the interior decorating at a price of $500. My question is, apart from any ethical question, what is my obligation to pay her for her services after she refused payment at the time the services were made? It seems that she is late filing her 1999 sales tax, and the amount that she quoted in the letter that I now owe seems very high. Could you please give me some advice on how to handle this and if she could sue me?

 

[JETX]

This one is pretty simple....

As to the tax issue:
You need to pay the tax. Anytime that a person purchases merchandise for their wholesale account, and then 'converts' that company property to personal use, they must pay sales tax on it (as if it had been purchased retail). Considering the situation, I would use the tax tables in affect at that time and calculate the tax based on the price you paid (not retail). Then make a check payable to the state taxing authority (just to make sure that she doesn't 'forget' about the tax).

As for the 'designer fee', tell her to pound sand. Unless you BOTH agreed to a fee being charged, she cannot come back 'after the fact' and create a unilateral contractual basis. Sorry, doesn't work that way.

 

[shaken not stirred]

My first thought, why would she charge you and increase her taxable income? Even if it is $500.00, I try to get my income down as much as I possibly can. I would point this out to her. I would be willing to bet she is owes alot in taxes and is trying to find ways to show profit losses and is hoping you refuse to pay so she can show these losses. Just a guess as to her motive.

I would also send her a certified letter explaining that you have no legal obligation to pay her as she refused payment when payment was offered because this was a gift. Keep a copy of this letter, you may need it later.

 

[JETX]

All Shook up:

Your reply post is somewhat puzzling and shows that you need to study your economics.....

You said, "Even if it is $500.00, I try to get my income down as much as I possibly can. I would point this out to her."

As I recall, the highest current tax bracket for income is 28%. This means that for the $500 in reported income, without other deductions, she would have to pay $140 in taxes (28% of $500) and be able to KEEP $360 of that same $500!! I will do this everytime.

Oh, and if you have any of this 'tax tainted' money that you want to send me, let me know. I am sure we can work out some way that will allow you to deduct the 'fees' that you pay me so that it will lower your tax burden!!

Sheez, get with the program. I don't like to pay taxes anymore than anyone else, but to just throw money away because you ONLY get to keep 62% of it seems a little strange.

 

[shaken not stirred]

Coming from someone who defended I am always liable. Well, I guess in that statement alone, I have made my point.

This is Paul Harvey, Good Day!

 

[JETX]

And now... page 2

And with your attempt at 'smart' reply, coming from someone who has absolutely no knowledge of his own.... I take that as a compliment!!

And, yes, whenever IAAL is correct, I will defend him (as I would you if you were ever correct).

And that, is the final story.

 

[shaken not stirred]

And with that, I concede. I was just trying to help.

What do you think the decorators motives are? Revenge over the failed marriage? I think that would help this lady.

I think sometimes it helps people if they know their accusers motives, then they can defend themselves, wouldn't you agree? This is all I was trying to do.


Let me know what you think.

Later

 

[JETX]

Yes, I agree that knowing (and understanding) someone motives or reasoning for doing something could be important. However, 'devining' that would entail far more information than is available on this forum.

And, since I have taken 'Mindreading 101' three times now, and failed it all three, I no longer attempt to read someone else's motives or thought processes, especially as far removed as we are from both of the parties.

I might add that part of the 'challenge' of the legal profession (and judgment recovery) is the "chess game" of trying to analyze the other player's moves and to be ready to counter them. After a while you gain a certain 'foretelling' of what they might do, but there are certainly enough spins to continue making it fun(?).

 

[shaken not stirred]

Sounds like a great job. How did you end up in this business? I bet you never get bored.

 

[visions]

Pay the Tax

I would certainly agree with the response from Halket. I have lived in Mississippi and was dealing in the wholesale market and mail order, what he says is correct pay the tax based on the price you paid, and make the check out to state tax board and memo on your check her name and tax id number. Request this info in writing from: Her tax id number. and who you should make the check payable to (which agency) do this by certified mail for your records just in case she wants to persue this. As for the rest tell her to pound the sand and cover her head.