Tax Liability from 1988

[StevenL]

I don't know if anyone can help with this but I thought I would throw it out here and see what happens.

Client brought in a "Statement of Liability" from the City of Detroit claiming she owes taxes, interest and penalties of $257. from 1988. This is the first notice on this that she can recall having received.

She did work in Detroit in 1988 but since its been over 20 years she doesn't have records from back then, having destroyed them years ago.

I told her I thought the best thing to do would be to have them provide proof that she owes this amount since it's from such a long time ago. I also think it's possible that a statute of limitations may come into play here.

Is you were dealing with a situation like this how would you handled it? What advice would you give to your client.

Thanks for your input.

[ILLMAS]

I don't know if anyone can help with this but I thought I would throw it out here and see what happens.

Client brought in a "Statement of Liability" from the City of Detroit claiming she owes taxes, interest and penalties of $257. from 1988. This is the first notice on this that she can recall having received.

She did work in Detroit in 1988 but since its been over 20 years she doesn't have records from back then, having destroyed them years ago.

I told her I thought the best thing to do would be to have them provide proof that she owes this amount since it's from such a long time ago. I also think it's possible that a statute of limitations may come into play here.

Is you were dealing with a situation like this how would you handled it? What advice would you give to your client.

Thanks for your input.

The same thing has happened in IL, 20yrs cases were opened again because of a new computer system they put in place in Jan. 09, read the following article and see if something can be done. Sorry I didn't have time to go through the whole article.

MAS

http://www.thetelegraph.com/news/tax_24374...stem_state.html

[kcjenkins]

CITY INCOME TAX ACT (EXCERPT)

Act 284 of 1964

141.688 Statute of limitations; waiver; payment of tax.

Sec. 88.

(1) Except in case of fraud, failure to file a return, failure to comply with the withholding provisions of this ordinance, or omission of substantial portions of income subject to the tax, an additional assessment shall not be made after 4 years from the date the return was due, including extensions, or from the date the return was filed, or the tax was paid, whichever is later. An omission of more than 25% of gross income is considered a substantial omission of income. Under this section a declaration of estimated tax is not considered a return.

(2) If the federal internal revenue service and a taxpayer execute a waiver of the federal statute of limitations, as to a taxable year, the expiration of the period within which an additional assessment may be made by the administrator or the department or a claim for refund filed by the taxpayer for such taxable year for city income tax purposes shall be 6 months from the date of expiration of the waiver.

History: 1964, Act 284, Imd. Eff. June 12, 1964 ;-- Am. 1996, Act 478, Eff. Jan. 1, 1997

So the real question is, did she ever file that year's tax return? Filing is what starts the clock ticking, so if she sends them a copy of her return she filed, that should settle it. Of course, it is likely she no longer has copies of anything she did that long ago. But I'd suggest that you write a letter stating that she filed, [assuming she says she always filed her returns] and that the SOL has long run on that year.

By the way, it took me about 30 seconds to find this info using google.

[StevenL]

Thanks for your input. I will pass this information along to my client.