An Update to the Collection Attempt for Back Taxes

About 1 month ago I received a terrifying phone call from DCS saying I owed a significant amount of money to the VA Dept of Taxation and needed to pay immediately or face wage garnishment.

Well as it turns out, after multiple phone calls to the VA Dept of Taxation, they did turn over an account in my name to a collections company. They claim I was delinquent on filing a tax return for YR2003 and the amount was turned over to collections was for amounts they felt I owed. The amount the collection company says I owed the VA Dept of Taxation was $11,033.19. How weird is that - down to the penny and that can't explain to me how that amount is really determined.

I told them I didn't understand why this was in my name as I had moved out of Virgina in 2001. While the representative didn't know all the specifics they claimed it was just likely due some flag on my federal tax return such as a VA address. They recommended I fax a copy of my 2003 Federal and NC state taxes to the VA Dept of Taxation for review.

I was quickly able to locate a copy of my 2003 returns (amazingly I had an electronic copy handy) and went ahead and faxed them to the VA Dept of Taxation.

I got a call back from someone at the VA Dept of Taxation claiming that Virginia still considered me a legal resident of VA even if I had moved to NC in 2001 and that they believe I owed back taxes for 2005 and there was a current review for 2006. I thought it was ludicrous and said that was impossible - I moved to NC in 2001, I work in NC, my primary residence is in NC.

However the VA Dept of Taxation had a record that identifies me as the co-owner of a car in Virginia. It is true - there is a car that I am listed as co-owner (with my father) in Virginia. How does this make me a legal resident of VA? Just because you own property in a state doesn't mean you are a legal resident - does it?

I sent a letter to the VA Dept of Taxation asking for an explanation as to their legal residency definition and what criteria is established to determine legal residency. We will see what they come back with.

Sounds to me like I am caught up in some government bureaucracy or wild goose chase by VA Dept of Taxation to boost revenue.

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Comments (2)

This sounds very wrong. I am a commercial lawyer and would be happy to assist you.

Posted by Matt | June 9, 2009 1:23 PM

I believe you should have filed a non-resident return to them, but there is no way you should owe that much money. If you have no income sourced to Virginia for 2003 then even if they consider you a resident you still don't owe anything. You need to mail them a letter detailing it. I'm pretty sure you can get out of nearly all the $11k some odd dollars that they are coming after you for.

Posted by David | June 12, 2009 9:03 AM