More Missouri Tax Fishing
It's not just from the IRS that we need to be on the alert for bogus tax notices. I just sent this email to a client, with a CC to the Missouri DOR:


Thanks for sending me the copies of the recent notices you received from the Missouri Department of Revenue claiming that you owe them taxes for the years 2000, 2001 & 2002. I'm assuming you sent me copies of everything you received from them, which makes these notices completely ridiculous and extremely unfair and illegal on their face.

When I have seen such claims of unfiled tax returns made by other states, such as California, they have included copies of W-2s or 1099s showing the income that they consider to have been earned inside their state. These Missouri notices give us absolutely no idea of how their tax calculations were made or what income they consider to be Missouri source.

It appears that the State of Missouri is increasingly desperate for tax revenues and is trying to pick on nonvoting out of state residents as an easy source of cash. Sending such bills without proper documentation of the underlying income that they are assuming is subject to their tax is insane. I'm sure they are banking on the shotgun approach to this scheme, assuming that enough people will just send them the money without taking the time to demand a proper explanation.

To straighten this out, I advise calling them at the number on their notices, or writing to them, and demanding that they send you complete written documentation of what they consider to be Missouri source income. We can then review your records to see if they are correct or not and take any steps that may be appropriate to correct the situation. This may possibly require us to prepare one or Missouri non-resident income tax returns, along with amended Arkansas returns to claim credits for the Missouri taxes.

I would contact the Missouri DOR myself, but they would probably insist on having a formal power of attorney authorizing me to act on your behalf, which I would be glad to do; but your contacting them directly would be faster. I am sending them a copy of this email and will be posting this on my blog to let them know that we will not just send them money without proper documentation.

To refresh your memory, here is my blog posting from earlier this year about similar notices some of my clients had received from the Missouri DOR. Those notices didn't have actual dollar amounts of taxes shown.
http://www.taxguru.net/2004/08/missouri-tax-fishing.html

Please provide me copies of whatever information you are given and I will check it against your tax return records.

Good luck.

Kerry

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/20/2004 03:15:00 PM Send this post: