Tax advice in a bad situation with state of CA (rubbing the lamp).

Is there any question that this BBS can't answer? I'm going to put it to the test again.

I need advice on what to do in this situation. If that advice is simply "go find a professional to help you", cool, but I'd like to make sure that I know exactly what kind of professional to look for (i.e., what page in the Seattle yellow pages do I turn to). I don't even know *that*. So I'm hoping someone can help.

The State of California tried to assess some taxes on me (to the tune of 32 grand) that I don't owe. It's taxes for property sale of a property that was handed completely over to my wife in the divorce a few years ago. She filed her taxes, and State of CA got paid the tax on the sale, so it should all be hunky dory, but it's not. They think I owe them, still.

They're also trying to tack on ordinary income taxes for a year that I didn't even live in CA and didn't have any employment or income at all (I just lived off of savings for that year). But the main thing seems to be the property sale.

I tried sending in a protest letter the first time, with a detailed explanation and documentation (including her tax returns) showing that I did not receive the income they're trying to assess, and that all necessary taxes were paid. It seems to have fallen on deaf ears, because I just got the SECOND letter, this time saying I'm delinquent and I'd better pay up.

It says I can file a protest letter, but hey, I already did that and it looks like that didn't work.

What do you guys suggest? I feel like I'm in Brazil here. I'm starting to understand Terry a lot more these days: as a way out of this, being tortured to death is looking more and more appealing...

You need a lawyer. Once who specializes in tax law. And I'm sure you need someone who has a California bar license. I would suggest you probably want to get someone in California. If you can find a lawyer in Seattle that has a California bar license, that would work, too, but it might be easier for you to deal with the lawyer remotely than for the lawyer to deal with the state remotely.

This sounds logical. Anyone second the advice, or dispute it?

Here in Canada, when something like that happens, I usually just telephone the tax office and speak with a case officer.

Things generally get cleared up after a week or three of investigation by them (and sometimes then come back to haunt again after 3 years or so).

It's definitely worth trying to call the tax office yourself and speak with a real person. My guess is that it won't work, but it's not going to cost you anything, whereas the lawyer most certainly will.

I say call them.. Most are willing to investigate, when someone is on the line. A letter is simply another piece of paper in an inbox that most likely will NOT get handled. Even better than over the phone is in person, depending on the drive involved.

Another vote for calling. I've actually made progress doing so for minor issues I've had in the past. Nothing to lose. Worth a shot. Ask them specifically what proof is necessary to support your claims and then ask specifically who that proof should be sent to. Then, I'd send what they specified via registered mail, and cc a lawyer. In fact, to really cover your ass, maybe you should record your phone call too. Better safe than sorry.

- Jon

I think often the second letter is sent out by default and doesn't take into account actions already taken on your part after the first letter.
So, you can try calling them, or waiting for the *third* letter. lol

Good luck!

God, I hope so. I also hope there's actually someone I can *call*. I don't recall seeing a phone number in the packet they sent.

I've never dealt with this sort of thing personally, but I've heard good reports from others about getting somebody on the phone at the IRS, so it's presumably a similar trick with the California tax people. I also agree that it's sensible to record the conversation (and make sure you state so up front, be immaculately polite, etc.).

Well, investigating this more closely, and talking with my ex, it looks like it's a lot worse.

It's not the thing I thought it was. That thing got closed out and taken care of, the stuff I sent them last May was just fine.

This is something totally new, and it's a lot worse. I can't even talk about it publicly now. Sorry. Anyway, thanks for the advice, everyone.

I know a director at the IRS and she received a letter from the state telling her she did her state taxes wrong (as did I). We both wrote polite and detailed letters explaining our calculations (actually I was owed $10 more that I originally calculated:) and the matter was dropped.

I suspect your letter fell into the hands of a part time clerk who then filed it in the circular "out" bin.

If you are in the right, I would call every day, document all the names of the people you talk to and try to talk to the head of the property taxing department, at least get their name. I would then send the letter every week and require a signature so you know who got the letter when they say they never got it.

If you bug them enough and talk to the right person you should be able to get this cleared up quickly. I would only get a lawyer if you do owe the money. A lawyer will help you out by haggling over the amount.

Don't mess around, get the tax lawyer on it. They know the angles, who to call, what to say. When Joe Taxpayer tries, the bureaucracy just steamrollers him.

Edit: It's the experience of my co-worker that makes me say this.

He, had a problem involving a combination of an incompetent tax filer, a home business (wife ran a day care) and various items related to a couple of adoptions. He was on line for taxes (not owed) penalties, and incipient wage garnishment. The disputed amount was over $20k. The tax lawyer was able to sort out everything except the day care stuff, a minor amount.

(You really want to declare some profit with a home business, or the IRS calls it a hobby and denies all your deductions. No profits are a red flag to the IRS.)