Any Missouri experts?

[mimi]

Any Missouri experts out there? My client has just received notice of lien on his property because MO says he owes taxes on income he made in TX after he moved there in 2006. He did live in MO, worked in KS, then in Aug 2006 relocated to TX for the same employer. TX has no income state tax, so MO says there is no other state's credit to be applied (there is for KS of course, but that is while he lived in MO.) He has since moved back to MO. It does seem unreasonable to me that MO wants income tax on income made in TX while living in TX. Any suggestions, please??? Thanks in advance for your help!

[TaxmannEA]

He needs to reply to MO stating that the income was received while a resident of Texas. You might even write up a PY Missouri return showing no MO income. I had one of these earlier this year. An Illinois contractor received a notice of liability for work he did in Illinois for a company based in MO. Since the address of the company accounting office was in MO, they thought that he owed them about $98,000. I did an NR Missouri return showing -0- MO income and it seemed to appease them. I think that they are trying to get money any way they can.

[Tax Prep by Deb]

This sounds alot like California. They are trying to get money every way they can and are getting more and more aggressive at it.

This year alone I have received three letters from the board of equalization reminding me that due dilligence on my part involveds making sure my clients are aware of the use tax law on purchases made out of state and on the internet. One even suggested that I look over there receipts to see if they owe it.

Since when did we become the tax collector? If I'm not mistaking someone else is being paid for that job and duty!

Just venting of course!

Deb!

[Margaret CPA in OH]

Ohio is in the same boat. The Use Tax law has been on the books since 1936 but is increasingly being enforced. To efile now, ATX does have a warning if that form isn't completed Yes or NO. I no longer automatically check it. I make clients, if here, answer and, if electronically reviewing returns, print the page, check and complete, sign and return.

Ohio DOT also now wants a check that a taxpayer receiving a direct deposit has read the blurb that it isn't the fault of Ohio if that deposit goes astray. Pretty sure they must have been sued at least once to get that. I also make clients check and sign the form that states, as the 8879, "under penalties of perjury..." I don't want an Ohio return audited and the client come back and say I didn't ask them about online or other purchases. As mentioned more than once this season, retirement looks increasingly interesting. I don't mind asking clients the questions but I really don't want to be an auditor.

[kcjenkins]

Well, lets be practical here. He lived in MO, took a temp job in KS, came back to MO. Then, took a temp job in TX. And then moved back to MO. Now, just because TX has no state income tax, he wants to claim that he was a TX resident? How real was that? Did he tag his car in TX? Did he change his voter registration? Join a church, or other organizations? What actions, in other words, did he actively take to establish Residence in TX? Did he move his entire home? When he moved back to MO, did he move to a new place, or back to the same place?

I think you are going to have a very hard time convincing MO that he die, in truth, move his residence to TX. The facts as stated sure do not sound like it to me, and I am on his side.

[jainen]

>>He has since moved back to MO<<

This is one you should probably refer to a colleague who specializes in non-resident issues. If Missouri thinks there is enough money involved to take a stand, they WILL win. That is because even though the taxpayer moved to Texas for a period of time, it was only in connection with employment. He did NOT cut all personal ties to his former state, and eventually moved back to Missouri. That is the quintessential definition of domicile, so in my opinion he does indeed owe tax to Missouri on his Texas earnings. It sounds odd, but it is entirely possible to be a resident of two states at the same time. However, he can only be domiciled in one state which does not change until a domicile is established elsewhere.

Also remember that a lien has been filed. That probably means the tax has already been assessed for what is now a closed year, taxpayer notified at last known address, time for appeal expired. Since you had to ask the question, it looks like you don't have the background to fight this. Get some help.

[mimi]

Just to clarify - He lived in MO while working in KS (common in the KC area since it lies on the border of both states). Moved to TX to take a promotion with same company. Bought a house in TX. Lived there 2 years. Moved back to MO and started his own business. (Thus he only moved back to MO once.) Did establish a residence in TX. His CPA in TX did reply to the 1st notice, and they believed it had been taken care of. Client (and possibly former CPA) continued to have conversations with MO (I'm not privy to the nature or results of those conversations.) I told him this project would have to wait until after the 18th, so I don't have exact details of his or his former TX CPA's previous conversations with MO, other than a copy of a reply correspondence.

[mimi]

Any Missouri experts out there? My client has just received notice of lien on his property because MO says he owes taxes on income he made in TX after he moved there in 2006. He did live in MO, worked in KS, then in Aug 2006 relocated to TX for the same employer. TX has no income state tax, so MO says there is no other state's credit to be applied (there is for KS of course, but that is while he lived in MO.) He has since moved back to MO. It does seem unreasonable to me that MO wants income tax on income made in TX while living in TX. Any suggestions, please??? Thanks in advance for your help!

Thanks everyone for the great feedback.

Just to clarify - He lived in MO while working in KS (common in the KC area since it lies on the border of both states). Moved to TX to take a promotion with same company. Bought a house in TX. Lived there 2 years. Moved back to MO and started his own business. (Thus he only moved back to MO once.) Did establish a residence in TX. His CPA in TX did reply to the 1st notice, and they believed it had been taken care of. Client (and possibly former CPA) continued to have conversations with MO (I'm not privy to the nature or results of those conversations.) I told him this project would have to wait until after the 18th, so I don't have exact details of his or his former TX CPA's previous conversations with MO, other than a copy of a reply correspondence.

[cathyan]

Mimi,

This sounds like one where you need to get the paper trail of his moving to TX and then back. Did he own or rent in the KS arera? If he owned a house, did he sell it, or rent it out? Did his company give him moving expenses? When he came back from TX, he would have had to get an exemption from previous years Personal Property tax, and Real Estate tax (unless he rented out a house.) Be sure to have paperwork showing home purchase in TX. Voter registrations? Children in school, church? Texas auto insurance and registration. Correspondence from MO, all that you can get. Tax returns from TX years. Get a MO POA, and take it all to the nearest MoDoR office, and take it up with them in person.