Ohio City Tax Oddity

[Ted]

We used to live in Ohio. We filed our taxes every year - federal, state, and local, and pay our taxes.

Over the weekend we got a very threatening letter from CCA (Ohio's state IRS from what I can tell) saying we owed significant sum estimated in taxes, interest, and penalties for the years 2014-2016 (we moved in 2015). The interest and penalties equal the supposed tax, by the way. They claim they've come up with this number based on IRS records that they have access to, and if we don't respond in 10 days they'll file criminal proceedings and a warrant for our arrest. This sounds like a scam, but after doing some Googling the organization is legitimate.

After calling the office and talking to someone who at least seemed semi-knowledgeable, they've basically decided I didn't file my taxes and will owe them some level of money, which I don't believe is valid at all but they operate under "guilty until proven innocent" and are asking for W2s, tax returns filed, etc., which based on their initial letter it sounds like they should already have. They also said that if they review my documents and decide "Oh, he doesn't actually owe anything" they won't send me a letter saying they've closed it out in their system. My recollection is I got called about this a few years ago and managed to settle it over the phone by pointing out I moved, which this woman said she wouldn't do.

It seems like this does require some sort of response. What I'm trying to figure out is whether I should be dealing with this myself or hire a professional at this point to deal with it on my behalf.

Every state is different on this (and probably every municipality) but I generally give the state of Ohio a poor rating on intelligence or competence with, well, anything.

 

[Hang 4]

The "warrant for your arrest" sounds fishy. Did you call a number that was on the letter you received or did you find an independent way to contact the Ohio tax authority?

 

[Sac Arrow]

Did you receive it by signed, certified mail? No legal document of that nature will be sent regular mail.

 

[Ted]

The "warrant for your arrest" sounds fishy. Did you call a number that was on the letter you received or did you find an independent way to contact the Ohio tax authority?

This is what I thought as well. Struck me as a scam.

Googling it led me to believe this is legitimate. Goes to the actual Ohio state of Ohio website with the same phone number:

http://ccatax.ci.cleveland.oh.us/?p=contact

Did you receive it by signed, certified mail? No legal document of that nature will be sent regular mail.

That was my other thought. Which makes it questionable whether any money could legally be levied.

It also strikes me as simply a money grab. But Ohio also sucks.

 

[Hang 4]

You got my curiosity up, it does look legit. They say that only cities with a certain population can access IRS info and Cleveland is big enough to do that. Cleveland seems to have turned that into a profit center. And one that does not have a lot of incentive to settle in your favor.

Often, when there is an organization like this, there are also professionals who know how to work the system. I'd suggest not doing this DIY.

 

[Ted]

You got my curiosity up, it does look legit. They say that only cities with a certain population can access IRS info and Cleveland is big enough to do that. Cleveland seems to have turned that into a profit center. And one that does not have a lot of incentive to settle in your favor.

Often, when there is an organization like this, there are also professionals who know how to work the system. I'd suggest not doing this DIY.

Cleveland using this as a profit center is one thing that I gathered from it, which makes me inclined to not give them a dime.

 

[bnt83]

It gets old hearing these stories about government phishing for tax income. The taxpayers should not have to put up with this crap.

 

[Doc Holliday]

Cleveland using this as a profit center is one thing that I gathered from it, which makes me inclined to not give them a dime.

You shouldn't have to give them anything if you owe no taxes to them. But they will not relent, and they can make it extremely difficult on you if they continue.

I had a similar situation a few years ago with another state who claimed I owed them money in a couple of years before I even moved there. They accessed my IRS records, saw a nice huge salary and decided they wanted the taxes from that income. I sent a letter, explained to them I didn't live in their state in the time frame given, they wrote back and said "prove it". So I sent another letter with 18 IOP's (items of proof) indeed proving I wasn't a resident of their state. They wrote me back and stated my evidence wasn't satisfactory, and pay up or else.

I sent the letter with the IOP's and a letter explaining my situation to the Governor's office and explained I felt this was heavy handed and unfair. The Gov's office contacted me immediately, and said the situation would be rectified. A week letter I got a letter from the state DoR telling me my case was closed.

 

[Ted]

You shouldn't have to give them anything if you owe no taxes to them. But they will not relent, and they can make it extremely difficult on you if they continue.

I had a similar situation a few years ago with another state who claimed I owed them money in a couple of years before I even moved there. They accessed my IRS records, saw a nice huge salary and decided they wanted the taxes from that income. I sent a letter, explained to them I didn't live in their state in the time frame given, they wrote back and said "prove it". So I sent another letter with 18 IOP's (items of proof) indeed proving I wasn't a resident of their state. They wrote me back and stated my evidence wasn't satisfactory, and pay up or else.

I sent the letter with the IOP's and a letter explaining my situation to the Governor's office and explained I felt this was heavy handed and unfair. The Gov's office contacted me immediately, and said the situation would be rectified. A week letter I got a letter from the state DoR telling me my case was closed.

Those were exactly my thoughts. The person basically said "You're going to have to pay us money no matter what", and my guess is that they saw a good income that they could extort a significant amount from and went for that based off of IRS records. She also said there was no way for me to prove that I actually filed my city taxes, which to me seems to be illegal at best. They can't prove that I got their letter, either, since it was sent normal first class.

So, it all wreaks of a scam, although sometimes states will do that as money grabs.

 

[Hang 4]

So my curiosity continues to get the better of me. Found this Attorney looking for people who fought the CCA. Look at the second paragraph in his bio. He's a private attorney who acts a Prosecutor for the CCA. Guessing he can't represent anyone due to a conflict of interest.

https://www.brouse.com/terry-w-vincent

What a racket.

 

[Kenny Phillips]

The "warrant for your arrest" sounds fishy. Did you call a number that was on the letter you received or did you find an independent way to contact the Ohio tax authority?

Well, a number of years ago I got a letter from the Ohio tax folks, saying I owed a bunch on employment tax on my S corp. I dug up my records, found that I had paid what they were after (we paid monthly, whatever amount the accountant said was due), called them, and that was that. Until a month later, when a sheriff's deputy served me with a notice to appear in court, about that very thing. (BTW, it turned out that I didn't put our tax ID on the check, but, of course, Ohio duly cashed it.) This was all over about $1,800, BTW. It cost both sides more than that before it was over.
It took FIVE rounds, with a new copy of the check each time, to sort it out. God knows what happened to the other copies; the last one I hand delivered to the person that requested it. My accountant agrees that Ohio have the worst tax collection organization.

 

[Rgbeard]

From what I gather, it's a "legitimate" racket, and my strong recommendation is to not continue without professional guidance.

It's time to engage your CPA.

 

[EdFred]

You guys didn't live in Cleveland. Tell them to pound sand, or just drop it in the shredder and forget about it.

 

[Rushie]

From what I gather, it's a "legitimate" racket, and my strong recommendation is to not continue without professional guidance.

It's time to engage your CPA.

And a lawyer.

 

[Ted]

You guys didn't live in Cleveland. Tell them to pound sand, or just drop it in the shredder and forget about it.

We lived in Hamilton, who supposedly contracts Cleveland to do these things because they have a revenue generation legal scam to do so.

 

[EdFred]

We lived in Hamilton, who supposedly contracts Cleveland to do these things because they have a revenue generation legal scam to do so.

Id'd still shred and ignore it. Until it shows up certified, too bad. It won't show up certified.

 

[Ted]

Well, a number of years ago I got a letter from the Ohio tax folks, saying I owed a bunch on employment tax on my S corp. I dug up my records, found that I had paid what they were after (we paid monthly, whatever amount the accountant said was due), called them, and that was that. Until a month later, when a sheriff's deputy served me with a notice to appear in court, about that very thing. (BTW, it turned out that I didn't put our tax ID on the check, but, of course, Ohio duly cashed it.) This was all over about $1,800, BTW. It cost both sides more than that before it was over.
It took FIVE rounds, with a new copy of the check each time, to sort it out. God knows what happened to the other copies; the last one I hand delivered to the person that requested it. My accountant agrees that Ohio have the worst tax collection organization.

Were you still living in Ohio when this happened?

 

[Hang 4]

Bored today, so here's at least one firm that says they work for you with CCA. One thing they mention is that they are on the phone with CCA daily. No personal knowledge or recommendation.

http://www.ken-martax.com/local-back-taxes/

 

[wilkersk]

Californistan does the same thing. They sent me a threatening letter, I sent it back with a copy of my Navy PCS orders. Never heard from them again.

 

[Let'sgoflying!]

"That's not your money. You just got to hold it for us, for a little while."

 

[Clip4]

We used to live in Ohio. We filed our taxes every year - federal, state, and local, and pay our taxes.

Over the weekend we got a very threatening letter from CCA (Ohio's state IRS from what I can tell) saying we owed significant sum estimated in taxes, interest, and penalties for the years 2014-2016 (we moved in 2015). The interest and penalties equal the supposed tax, by the way. They claim they've come up with this number based on IRS records that they have access to, and if we don't respond in 10 days they'll file criminal proceedings and a warrant for our arrest. This sounds like a scam, but after doing some Googling the organization is legitimate.

After calling the office and talking to someone who at least seemed semi-knowledgeable, they've basically decided I didn't file my taxes and will owe them some level of money, which I don't believe is valid at all but they operate under "guilty until proven innocent" and are asking for W2s, tax returns filed, etc., which based on their initial letter it sounds like they should already have. They also said that if they review my documents and decide "Oh, he doesn't actually owe anything" they won't send me a letter saying they've closed it out in their system. My recollection is I got called about this a few years ago and managed to settle it over the phone by pointing out I moved, which this woman said she wouldn't do.

It seems like this does require some sort of response. What I'm trying to figure out is whether I should be dealing with this myself or hire a professional at this point to deal with it on my behalf.

Every state is different on this (and probably every municipality) but I generally give the state of Ohio a poor rating on intelligence or competence with, well, anything.

Just wondering, did you live and file taxes in City A and work or have a business in City B? If so, you had to file and pay taxes in City B.

In Ohio and other states the cities do file criminal charges for tax evasion.

 

[wsuffa]

This is why I pay a CPA. As i recall, when I lived in Ohio there was some noise about not paying sales tax on the plane. Of course we had, and the accountant got it resolved post-haste.

What's even more annoying is that some other states are worse.

 

[Ted]

Just wondering, did you live and file taxes in City A and work or have a business in City B? If so, you had to file and pay taxes in City B.

In Ohio and other states the cities do file criminal charges for tax evasion.

I lived in City A and worked in City B. City A is the one complaining, but I filed in both City A and B.

 

[Tarheelpilot]

Don’t ignore it. I’ve dealt with those people. They are state criminals.

 

[Clip4]

I lived in City A and worked in City B. City A is the one complaining, but I filed in both City A and B.

Sounds like you will get it straightened out.

 

[Kenny Phillips]

Were you still living in Ohio when this happened?

Yep. But I know of others who were assessed sales taxes by Ohio, and their companies were in Kentucky, and they did no physical business in Ohio! Ohio will just make up a number (for them, it was $44K in sales tax, based on ... nothing.)
They can't serve you if you are outside of Ohio, I don't think.

 

[Omalley1537]

The warrant part strikes me as very odd.

in my state (WA) warrants are only issued for criminal matters, and this situation would most definitely fall under civil. The only way a warrant gets issued for civil matters is when someone has failed to do what the court ordered them to do, and these warrants are for “civil contempt.” I’ve seen them most often in child support non-payment situations.
I’d be highly suspicious of anything demanding money and saying that a warrant would be issued for non-payment (especially when it isn’t some ongoing court situation).

 

[Ted]

The warrant part strikes me as very odd.

in my state (WA) warrants are only issued for criminal matters, and this situation would most definitely fall under civil. The only way a warrant gets issued for civil matters is when someone has failed to do what the court ordered them to do, and these warrants are for “civil contempt.” I’ve seen them most often in child support non-payment situations.
I’d be highly suspicious of anything demanding money and saying that a warrant would be issued for non-payment (especially when it isn’t some ongoing court situation).

They specifically stated filing criminal charges for non-payment, which apparently may be a thing in Ohio.

 

[Omalley1537]

They specifically stated filing criminal charges for non-payment, which apparently may be a thing in Ohio.

Very strange. It seems like that would be something they’d do if other means had failed over a period of time.

 

[Skip Miller]

.... It took FIVE rounds, with a new copy of the check each time, to sort it out. God knows what happened to the other copies; the last one I hand delivered to the person that requested it.

Time to go on the offense here. Send in a claim stating that you have OVERpaid your taxes and demand a refund! -Skip

 

[steingar]

This smells. Anything with any real weight comes certified. They can't prove you received a damn thing (unless they recorded your phone call, oops). Moreover, they can issue all the Ohio warrants they like, you live on a farm just outside Bumphuck West Egypt. You weren't in a hurry to go back to Ohio anyway, you didn't like it.

 

[ja_user]

Kansas City MO does this with their 1% earnings tax. Years after I stopped working there they would call in June or July and ask why I didn't pay them. It's like they can't imagine anyone switching jobs outside the city, which is odd since that is exactly what everyone does. After 3-4 years they finally stopped calling.

 

[sourdough44]

I’d at least get copies of your returns for the years in question, stored often with prep services.

I’ve had a bit similar with the State of WI, waiting to hear back after sending them copies with a nasty gram a month ago.

 

[Ted]

This smells. Anything with any real weight comes certified. They can't prove you received a damn thing (unless they recorded your phone call, oops). Moreover, they can issue all the Ohio warrants they like, you live on a farm just outside Bumphuck West Egypt. You weren't in a hurry to go back to Ohio anyway, you didn't like it.

I agree with everything you said there (looks like Hell is freezing over again - we're in agreement). After calling I figured there may have been merit to not calling since they could have recorded or made note of the fact that I called, but ultimately they can't prove I received anything otherwise and I feel like other than sending threatening letters there's not a whole lot they could do from a practical matter. One friend of mine got hit up by New York State a few years back, them claiming he owed taxes for being a resident (he wasn't, but he was working there). He actually got served papers and since he was in NYS for his job, more issues.

Like you said, I didn't like Ohio at all and the probability of me going back is pretty close to zero. I certainly am not going to write them a $15k check to make them go away.

 

[Lachlan]

I thought this was exactly the type of situation that bulldozers were built to handle.

 

[Ted]

I thought this was exactly the type of situation that bulldozers were built to handle.

 

[Rushie]

I agree with everything you said there (looks like Hell is freezing over again - we're in agreement). After calling I figured there may have been merit to not calling since they could have recorded or made note of the fact that I called, but ultimately they can't prove I received anything otherwise and I feel like other than sending threatening letters there's not a whole lot they could do from a practical matter. One friend of mine got hit up by New York State a few years back, them claiming he owed taxes for being a resident (he wasn't, but he was working there). He actually got served papers and since he was in NYS for his job, more issues.

Like you said, I didn't like Ohio at all and the probability of me going back is pretty close to zero. I certainly am not going to write them a $15k check to make them go away.

If it was me I'd be calling somebody like the guy that wrote this: https://meyersroman.com/ohio-tax-collection-rules-create-challenges-for-resolving-tax-claims/

Lawyers will usually give you a phone consult for free. This is predatory fishing for $$$$$$ and legally sanctioned thuggery. (Assuming you don't actually have a tax liability you're unaware of.) If no liability exists, a lawyer should be able to make this go away with one letter. His charge for one letter might be good insurance against these folks trying to come after your assets.

It might be worth waiting to see if you get a certified letter as Edfred and steingar say, but if it were me I'd go on the offensive. I would not contact them by myself again. If it were me, I'd be talking to an Ohio CPA to make sure I don't actually owe anything, get the CPA to give the info to the lawyer, and then get the lawyer to tell these people, in writing, to pound sand.

 

[NealRomeoGolf]

Sounds to me like they are too late unless they are trying to get you under the 6 year rule. From the CCA website (underlining done by me). And the "criminal proceedings" are a misdemeanor punishable by $500 fine.

• Civil actions to recover municipal income taxes and penalties and interest on municipal income taxes shall be brought within three years after the tax was due or the return was filed, whichever is later. No return will be considered filed until it is complete in all material respects.
• Prosecutions under the ordinance shall be commenced within three years after the commission of the offense provided that in the case of fraud, failure to file a return, or the omission of 25% or more of income required to be reported, prosecutions may be commenced within six years after the commission of the offense.
• When a taxpayer appeals from the final assessment of the Administrator, the taxpayer shall either pay the disputed assessment or waive the statute of limitations for prosecution of Section 191.1506 Codified Ordinances of the City of Cleveland, 1976, and Ohio Revised Code Section 718.06 by signing the waiver of prosecution form provided by the Administrator. No appeal will be perfected without the waiving of the limitation on prosecution or paying the disputed assessment.

 

[lowtimer]

Is there any way for this to "touch" on your medical if it goes thru the system poorly in Ohio?

 

[Ted]

Sounds to me like they are too late unless they are trying to get you under the 6 year rule. From the CCA website (underlining done by me). And the "criminal proceedings" are a misdemeanor punishable by $500 fine.

• Civil actions to recover municipal income taxes and penalties and interest on municipal income taxes shall be brought within three years after the tax was due or the return was filed, whichever is later. No return will be considered filed until it is complete in all material respects.
• Prosecutions under the ordinance shall be commenced within three years after the commission of the offense provided that in the case of fraud, failure to file a return, or the omission of 25% or more of income required to be reported, prosecutions may be commenced within six years after the commission of the offense.
• When a taxpayer appeals from the final assessment of the Administrator, the taxpayer shall either pay the disputed assessment or waive the statute of limitations for prosecution of Section 191.1506 Codified Ordinances of the City of Cleveland, 1976, and Ohio Revised Code Section 718.06 by signing the waiver of prosecution form provided by the Administrator. No appeal will be perfected without the waiving of the limitation on prosecution or paying the disputed assessment.

Interesting. So since I moved in 2015, that would've put earlier this year as 3 years past tax due date, and therefore outside of the limitations. So if I try to fight the assessment (other than with a "**** off" legal letter) it looks like I basically waive the statute of limitations.

The misdemeanor is perhaps more concerning since that could have some implications.

Is there any way for this to "touch" on your medical if it goes thru the system poorly in Ohio?

I'm not sure what you mean there.