Why did the state take years to fine me for a payroll tax error?

Beware the zombie tax scare! 😱

No, this isn’t a spooky Halloween story, this one actually happened.

A client got a nastygram from the state notifying them of tax penalties going back to 2019. They owed almost $50,000 in back taxes, fees, and penalties.

Except that something didn’t add up. They didn’t even have employees for half that time, and one of the people they were assessing violations on wasn’t even in the state. 

It was an obvious shake-down, but to reduce the fines and clear the client’s good name, someone would have to know what to ask. 

“Hang on, owners aren’t subject to this requirement. Did you have any non-owner employees at the time?”

No.

“Hang on, Owner 2 was paying taxes in a state 2,000 miles away at the time. Were you even a resident of [shakedown state] in 2020?”

No. 

“Hang on, this tax would have only applied to in-person work but your business was impacted by the pandemic. Did you even have any on-location work at the time?” 

No. 

By the time it was all said and done, we’d reduced the fine from almost $50K to less than $7K. A bummer for sure, but not the disaster it could have been.

Tax-idents happen, but zombies don't always mean it's an apocalypse. 

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🧟‍♀️ Hi, I'm Claire. I'm a vegetarian, so no need to fear me when the zombie apocalypse comes. I only eat "Graaaaaaaaaains!"

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