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

I have a friend that just went through a divorce after 10 years of marriage. Some 11+ years ago when she was single, she filed her IL State return believing it was correct and she wrote out a check for the amount due. She moved after that and left a forwarding address and has filed all her tax froms each year. She then got married in 1994 and her and her husband filed all taxes while they were married (state and federal of course) They received state tax refunds for 8 of the 10 years they were married. Her social security number has never changed and has been on both her state and federal returns each year. During this whole period of time, not once has she received a IL Tax Due statement. She "just" received a notice on 4/17/04 that back in 1989 she did not pay enough IL state tax on based on her return she filed for 1989. The underpayment was $15.00, the penalties now are up to nearly $700.00 for this $15.00 underpayment and as I said she was never contacted by the IL State all these years and they never took any of the IL State Refunds that her and her husband received over the last 10 years that they were married (her social security number was on it and they knew where she lived for the last 10 years).

Again I want to stress they never contacted her about this underpayment for at least 10 years when they knew where she was. The notice she just received was the first she ever received in all these years. She would have paid the $15.00 back in 1990 if she would have known about it and she surely would have paid it during this long period if she would have known. She cannot afford to pay the $700.00 and she also feels it is unfair since they did not contact her when they could have.

I don't agree with you folks who say challenging the bill is a waste of time. If the taxpayer is right, then fight them. The one time the IRS came after me for a late filing, I fought them. It took about 9 months and a few letters in the mail but when they were unable to prove that I mailed in my tax forms late ( I mailed them at a post office 2 days before April 15), they had to drop their case.

You just need to fight them and be just as relentless. There should be a statute of limitations for the state. I have a suspicion that they may have notified her ex-husband in time to meet that statute. So finally, after all these years, they "found" her.

This isn't a "LATE FILING" its an unpaid tax bill.

Proving you filed on time is not a big deal.

The problem this woman has is she underpaid her taxes by $15 years ago or whatever it was.

That underfiling if legitimate is morally and legally the responsibility of the taxpayer, just like any other bill someone owes. There is no statute of limitations on DEBT.. I don't know where you are getting that from.

If you owe me, I can come after you until you die for that debt, unless you file for bankruptcy... you don't know what you are talking about with this statute of limitations nonsense. Its debt, not a crime... and you are liable for it until the day you die, and then your estate is liable for it.

By the narrative of the poster, there is no challenge that the person underpaid, just what she should do about the debt owed... and in reality like any debt owed, you pay it, like you are legally and morally obligated to.

If there is no dispute that she underpaid (which according to the original poster there isn't) then she is liable for this debt and needs to pay it.

She has 3 options, 1) pay the amount in full and be done with it. 2) call up and see if the state will negotiate a lower payment as payment in full.. or 3) refuse to pay it and watch her house and or any other asset of value get liened and/or siezed to pay it.

That's reality. There is no statute of limitations on unpaid debt. Bankruptcy is the only thing that whipes out debts, and governmental debts can survive even bankruptcy.

Top of the mornin to ya a_g"

I think the key word is in here somewhere..."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. "

although 99% of the sheep don't have the gones to challenge the state to show them a law as Whitey did.

In MN it's like this...Minn. Stat. 290.03 Subd. 19. Net income. The term "net income" means the federal taxable income, as defined in section 63 of the Internal Revenue Code of 1986, as amended, incorporating any elections made by the taxpayer in accordance with the Internal Revenue Code in determining federal taxable income for federal income tax purposes,

in my hearing the Attorney for the Dept. of Rev said "well I know that's what it says but that's not what it means"

Avoid the 4 felony counts, and necessity to fight them to preserve your liberty. A very costly endevour even when you win.

Pay the tax, then sue for refund if you want to battle the system and challenge the law. No risk of imprisonment or fines if you loose. Law actually gets changed if you win.

Criminal trials do not change law nor change civil liability(recall O.J). Successful civil suit carried to completion by fighting all the way through the appellate process can.

Here's one I would try just for grins and to turn their screws a little. I would think if they can come after you after so much time has passed, you should be able to file an amended return. Just add a little to the charitable donations $15.00 and their point is moot. If not I would send them $15.00 and say come get me. You will have paid the underage as soon as you were notified. Make them prove you were previously notified. Did you get a notice of an error on your Federal Form for the same year?

There is no statute of limitations on DEBT.

Are you sure about that? I was under the impression that in most if not all states debts became uncollectable if the creditor failed to notify (or make demonstrable effort to notify) the debtor for some period of years following the incursion of the debt, last scheduled payment, or last demand for payment, whichever occurs last.

Were this not the case, someone who lent money to someone and had since been repaid could go after that person fifteen years later and claim the debt was still paid; unless the debtor had kept proof of payment for that fifteen years, there would be no way the debtor could prove the debt had been repaid.

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.

I agree with this advise from another FReeper. And I would add, tell your friend to be sickeningly nice. Talk slow, ask polite questions such as, "can you explain to me again what form I need" and "where do I get that form."

In other words, make it more of a pain to deal with you that solving your problem is easier for them. Be a pain in the nicest, sugar coated (but not obvious) way that you can. Call back a couple of times, making sure you get the same person. Call just before lunch, maybe 20 minutes ahead of time. If they direct you to another person, explain to that "other" person that the first person said they could help you.

It is a lot of effort but the approach works. They do not want to deal with you any more than you want to pay the $700.00.

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