Illinois State Taxes - $15 underpayment, turns into $700 bill - need advise

myself ^ | 4/19/04 | brigette

[stlnative]

My question is... Should she just pay the $700.00 (getting a tax attorney will cost her way more than the $700.00) or can she handle this herself and contest it? Is there not a statue of limitations on State Tax in Illinois? (She called IL State and they claim they have contacted her before 4/17/04 (which is BS) and she has 10 days to pay up - what is strange is she has been divorced and in at a new address for just the last 6 months and they found her, but they could not find her for at least the last 10 years while she was married and living at the same address for the last 10 years)

Thanks for any help you can give. She is on a budget, so she needs to figure out how to fight this on her own or to just pay up the full $700 (which is jumps up by a few dollars each day that she does not pay it) The amount stated on the notice is already less than what the true bill is now, as they told her what the new balance owed was when she called to inquire about it.

[Hank Rearden]

Tell the parasites to jam it; they snoozed, they lose. Ignore them.

[Monty22]

Good luck on your.. Oh, I mean.. friend's problem.

[GoLightly]

Tell her to ask for a copy of all notices they sent. She should be able to settle it herself, though she might have to be determined & put in some time writing letters & making phone calls. Also, she could ask for assistance from one of her local pols.

[DeaconRed]

Move to Florida
No State Income Tax! ! ! !

[stlnative]

LOL.. really it is not my problem. I am still married (very happy, no divorce in my future!) - She has bought a house and is worried they will put a lein on it, not to mention the interest and penalties keep racking up.

[ClearCase_guy]

The expression "You can't fight City Hall" comes to mind. Right or wrong, I suspect that paying the bill quickly will be the best course. But I'm no expert.

PS I'm surprised they can dig back more than 7 years. I thought that was some sort of window beyond which the gov't could not dredge up the past (without good cause). But, as I say, I'm no expert.

[Prime Choice]

I had a similar situation, only the federal government tried to hit me up for a $23,000 tax bill that they claimed I never paid. I went straight to a tax attorney and -- with just a $75 fee -- got the whole thing straightened out in a day. That's my experience. Very affordable, very non-stressful.

Encourage your friend to consult a tax preparer if not a tax attorney. Either should be able to steer her in the right direction in resolving this dispute.

Also, unless I'm in error, if the government screws off for more than 7 years in not contacting a person over a tax dispute, the government has to eat the loss.

[stlnative]

Well with it being State (IL) and not federal, I don't know if there is a limitation. I asked her if she was sure it was from the State of IL, she said yes. (I need to go over and look at it myself.) I am hoping someone can tell me if there is a limitation in IL, I mean we are talking this is way back from 1989 and she had no idea about all this until the letter came in the mail on 4/17/04.

[HamiltonJay]

In all honesty, its easier to pay the bill and be done with it.

Challenging it is going to be next to impossible.

Even if your friend was never contacted it does not negate her responsibility to pay, nor the penalties and interest due.

She can either contact a lawyer to deal with it, and likely pay way more than $700. Try to negotiate settlement herself for less than $700 or just pay the full amount and be done.

[CyberCowboy777]

Not sure about the individual states but the feds can't go fishing beyond 3 years (IIRC) unless they are investigating fraud. An underpayment is not fraud in and of itself.

[Hank Rearden]

Right or wrong, I suspect that paying the bill quickly will be the best course.

I disagree. Rolling over for the parasites just encourages them. This is ridiculous; she needs to go to the local TV station and newspaper, with a list of the parasites' names, not send a check.

[kezekiel]

Tell the parasites to jam it; they snoozed, they lose. Ignore them.

The power of the lien, brother. If they want it, they can take it... bank accounts, property, you name it.

[mvpel]

I had this problem with MichCon - we financed a furnace through them, and then moved about a year later. They had been collecting on the loan through the gas bill, and they didn't clue in to our forwarding address when we moved and we forgot to specifically inform them (I was already working in California and my wife was back home, packing up the house.) That was just over six years ago.

Late last year, after moving to New Hampshire we got a bill for nearly $4,000 with interest and penalties, on a $1,500 remaining balance on the loan.

I sat down and used Excel to calculate out the Michigan "judgement interest" accrual for the loan - the "judgement interest rate" is set by law in each state at a certain percentage each quarter, and is used to calculate interest due on court awards and other legal settlements. Do a web search to find the table for Illinois.

I sent them a check for $2,132, with the phrase "PAYMENT IN FULL FOR THE ENTIRE OBLIGATION" written in the endorsement block on the back, along with the printout of the judgement interest spreadsheet calculation, and that satisified them.

They did their own calculation as to what it would cost for them to take me to Federal court to collect the rest of it, and decided that $2,132 was better than nothing, which is what they'd had for the past six years.

Now, this may not work with a tax agency, of course, but it might be worth considering.

[stlnative]

Hank... I was thinking the same thing. She should contact the news watch dogs. I told her I would not pay it and that I would fight it tooth and nail. She is a licensed daycare provider in her home now (that is how she pays her bills, but she was one before she was divorced - she provided licensed day care in the home she had with her husband) so I don't know if this is really how they found her. She is busy taking care of kids and I told her I would look into it the best I could. She bought a house and she is worried they will but a lien on it.

[MosesKnows]

Ignore them

That is not very good advice. Face it, deal with it, and be done with it. Your friend has been abused indeed but that fact alone will not relieve the abuse.

Send something to the address that the Department of Taxation says they used and see what results. Many states are scrambling for revenue and these things rarely just go away on their own.

[retrokitten]

the full $700 (which is jumps up by a few dollars each day that she does not pay it)

Like the mafia.

[lilylangtree]

Yikes! Seems like a long time has passed for the IRS to try and collect from an underpayment with no notices during the intervening time. Do you have a law school nearby? Sometimes the profs (who are lawyers) do pro bono work. Maybe one specializes in income taxes. How about any accountants that the person and her husband uses? Maybe he/she has info on hand.

[patriot_wes]

Why not do what Mr. Whitey Harrell also of IL did?

Logan County Jury Acquits Harrell Lincoln - Gaylon "Whitey" Harrell of rural Latham was acquitted by a 12 person jury of the 4 count criminal felony charges of willful failure to file an Illinois State Income Tax form.

The actual trial began on Wednesday May 24th, 2000 in the Logan County Circuit Court room, presided over by Senior Judge David "Slick" Coogan ("Slick is how the judge identifies himself) and closed on Friday after four hours of deliberation when the jury returned with four consecutive "not guilty" verdicts.

"We were in a heated debate" reported one unnamed juror, "but when the court refused, after our specific written request, to furnish us copies of the actual statutes, (that imposed the obligation on the defendant,) it didn't take long for all of us to see that something was wrong with the State's case.

"That was not all the court refused to let the jury see," added Jerry Barringer, Harrell's attorney. "The court, at the request of the Illinois State's attorney, denied the jury access to evidence that already had been introduced and accepted." "Astoundingly, even the Bill of Indictment was denied to the jury." chimed in Barringer's legal assistant Lindsey Springer, "Also denied were jury instructions sanctioned by the Supreme Court and even a VCR recorder to play the video tape that Whitey had made of his meeting with the CID agent."

"I've seen a lot of tyranny in the courts, but never anything so blatant as what I saw here over the last two days," added Bob Minark, an Indiana friend of Harrell's. The 4 criminal felony charges had been brought against Harrell in 1997 and just came to trial this past week. Harrell had submitted numerous motions in a case that saw both assigned judges and assigned state's attorneys resign or recuse themselves. All Harrell's motions were denied.

The case started back in early 1997 when Harrell was approached by Illinois Dept. of Revenue Criminal Investigation Division (CID) agent Robert Craner, who asked him for an interview. The testimony was that Harrel refused until he had witnesses present and a video camera set up at the local library where he later video taped a 45 minute meeting with Craner. On the video, which was shown to the jury at the trial, Harrel specificlly pointed out that he could find no section of the Illinois statutes that obligated him to file an Illinois income tax return. He presented Craner with numerous documents which he identified as outlines of statutes and regulations and "administrative code" which he said he searched to no avail in finding any obligation that would apply to him. Craner accepted the documents. The tape showed that Craner promised Harrell at least five different times, to produce the statutes that made Harrell liable and get answers to Harrell's questions.

The testimony later showed that Craner didn't do that and instead went back to the Grand Jury to testify that Harrell was a resident of Logan County who failed to file Illinois state income tax forms. Unbeknownst to Harrel, at the time of the interview, Craner was also acting as a Grand Jury investigator. "He never told me," said Harrell, "He never read me a Miranda warning. He just promised to get me the information, but instead went back to the Grand Jury to get an Indictment." Grand Jury Transcripts show that Craner testified that Harrel, at the library meeting, had nothing to offer in his defense of why he didn't file a tax return, but the video tape brought Craner's credibility into serious question.

Harrell testified in his own defense and verified his many efforts to obtain the law that made him liable for the income tax or how his activity was privledged. The prosecution brought out on cross examination that Harrell had filed many law suits in the past and that those suits were dismissed in both the state and federal courts. In an attempt to prove knowledge, the state also elicited that Harrell had previously filed tax returns previouslly. Harrell's Attorney Barringer likened that to believing in Santa Claus when you were a child and then gaining knowledge of the fact that Santa Claus is a fantasy as you got older and wiser. Barringer's questioning of Agent Craner as to his belief in Santa Claus brought an objection from the State's attorney which was sustained by the judge without any recognition of humor.

Harrel, 62, had worked for the United States Post Office as a rural mail carrier and also received a pension from Caterpiller from where he retired in 1990.

Asked if his case will set a precedent, Harrel said, "Legally, No, but I certainly hope it sets the precedent that more people question the loss of their rights and property whenever government claims its the law. I feel sure this jury will be thinking twice."

Interestingly, even after the specifc request of the jury, neither the state or the court ever did produce any statute showing Harrel had any obligation.

"We don't have anything to say at this time other than Mr. Harrell was very lucky and we will be watching his activities carefully," stated an assistant State's Attorney who asked not to be identified.

Harrel plans to keep up his efforts to expose, what he says, is the one of the largest frauds ever committed on the people of Illinois. "Al Capone couldn't hold a candle to these guys," Harrell commented when talking about the State's claim of a requirement for wage earners and independent contractors to file a state income tax form. Harrell's bail bond has been released and the funds obtained from Harrell to gurantee the bond will be returned. No further court actions are pending against Harrell at this time, but Harrell anticipates further actions by himself against both the state Department of Revenue and the federal Internal Revenue Service. *****

[stlnative]

Many states are scrambling for revenue and these things rarely just go away on their own.

This is exactly what I think it is... Illinois is hurting for money. The state guy on the phone said they go through the system about every 10 years. So I bet they have not tried to contact her for at least the last 10 years, now they are on the hunt for back taxes because the state funds are so low. This state is awful!, they tax the hell out of cigs and gas, as well as everything else!


I'll check back later to see if anyone can tell me if IL State has a limitation of taxes. It is just nuts that this is over a $15.00 underpayment she knew nothing about!