"Mahesha" <ycmahesh[at]hotmail.com> wrote:

- quote -

I do feel for you, really I do. However, ultimately you are
responsible for filing correct and accurate returns. Block may
be liable for the penalties and interest, but now you have to
prove it. And no, the address on your W-2 is NOT proof of
where you lived, just the address of record with your employer
for the date they issued you the W-2. In theory, you could have
moved from NJ to MA on 01/01/X2, changed your address with your
employer, and had your Year X1 W-2 issued with a MA address.

I think you need to push Block a bit more, but this is going to
become a legal battle now and you would do well to contact an
attorney and have him write a letter to Block. You should also
write a letter to MA and explain the situation to them - in
great detail - and ask them to please abate your penalty. They
have discretionary authority to abate penalties and if they do
so your interest will also go down.

NJ will loan you the $2K to pay MA right after pigs fly over a
frozen Hell! It simply isn't going to happen.

Lastly, and I don't mean to be rubbing salt in your wound, but
I hear about problems like this all the time with HRB.
Storefront tax prep offices are not usually staffed with
knowledgably professionals. While there are
exceptions to that rule, in my experiences HRB does best with
very simple, plain vanilla returns with no complications.

HRB is cheap for a reason and you got what you paid for. In
our office your return would have been no less than $350.

Good luck,
Gene E. Utterback, EA

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"Charles Markham, EA" <goaheadandspamaway[at]aol.com> wrote:

- quote -

Sorry, Charles, Indiana won't allow the credit. See the
regulations (IAC Rule 3.1-1-76.)

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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Mahesha wrote:

Note before getting started--the real problem here is a
malpractice claim which will likely boil down to a swearing
contest--what you said vs. what the HRB employee claims you
said. You say you explicitly told him/her about the
Massachusetts residency, while he/she claims you did no such
thing. It would certainly appear that one of you is telling
an untruth <grin> , and that one would appear to bear primary
responsibility in this matter.

- quote -

That doesn't necessarily prove you were a Massachusetts
resident, though it clearly might arguably raise a question.

Possible explanations for why you wouldn't be a
Massachusetts resident would include:

1. You moved to Massachusetts early in the current year, so
the address was updated before the W-2 was issued, but you
actually lived in New Jersey before that date.

2. You continue to live in New Jersey and Massachusetts.
While your mail is sent to the Massachusetts address, you
are not a resident for Massachusetts income tax
purpose--perhaps because you live the vast majority of the
year in New Jersey

3. A few other options...

- quote -

As noted, this is a legal issue on malpractice. If, in
fact, you never disclosed the Massachusetts residency and
did not question why only a New Jersey return was prepared,
then HRB may be justified. However, if you did what you
said (told the HRB employee about your residency and were
specifically advised that based on your situation no
Massachusetts return was required), then it seems rather
clear that HRB was responsible for advising you that no
Massachusetts return was required and that you relied on
that advice.

- quote -

Well, if they make you whole on this thing, I would say they
"earned" the $160. And if they don't, then the $160 is the
least of your problems. A court most likely order them to
pay the penalties and at least the "net interest" (amount
you paid in excess of any amounts credited to you).

- quote -

They likely don't need to loan you the $2,000, but you could
very well have a claim against them for any damages you
incur due to the financial problems created--so it might be
in their interests to do so <grin> . However, if you could
borrow the money on your own at *any* rate of interest, it's
likely their damages would be limited to that interest you
might incur rather than any broader damages just because you
refused to borrow it.

The real problem here is that you have a potential legal
claim against Block that, if it had to go to court, could
cost more to litigate than the damages available. So the
best route might be to attempt to push the case "up the
line" in Block to see if you can get some relief from them.

--
Ed Zollars, CPA
Phoenix, Arizona

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Charles Markham, EA <goaheadandspamaway[at]aol.com> wrote:

- quote -

I can't speak for IN but I'll bet OH will take your money,
just fine ;^)

--
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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This is for a mid-west accountant with some prior
experience in this area...

I am dealing with a returning client that moved to Indiana a
couple of years ago and stopped filing his taxes. He has
come back to me to file the last few years.

The problem is that he worked in Ohio (a reciprocal state)
and the Ohio employer withheld Ohio taxes (as opposed to IN
taxes) (as a reciprocal state is supposed to do.)

The instructions say to file the OH tax return and get a
refund of all withholding back. That means he'll owe a lot
on his (very late) IN taxes.

What I want to do is file the OH, pay the taxes, file the
IN, and take a foreign tax credit for OH taxes paid. This
will eliminate his IN balance due.

Can I do this? In other words, are the reciprocal tax
agreements MANDATORY or are they optional?

If I simply go ahead and do it, will IN refuse the OH tax
credit?

Charles Markham, MST, EA
Norwell, MA

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This is regarding a serious issues I'm facing right now with
my tax returns for year 2000. I work for a IT company which
is based in New jersey. I lived and worked at client
locations in Massachusettes(MA) from June 1999 - Dec 2000(1
1/2 years). As my employer was based in new jersey they had
deducted my state taxes for the state of New Jersey. So when
I filed my tax returns for the year 1999 at Tax Man , I was
adviced that I will need to file a Non resident return to
NJ(as I lived & performed client services in MA) get back
all the tax paid to NJ and then file a Resident return to
Massachusettes and pay the tax owed to MA. This perfectly
made sense to me and we filed my state tax returns as NJ(non
resident) and MA(resident). Due to change in job assignments
I had to relocate to new jersey in Jan 2001.I had just
received my W2 for year 2000 and filed the tax returns at
H&R block after relocating to NJ in Feb 2001. And my postal
address in W2 for year 2000 is my Massachusettes address.

While filing my returns at H&R block I clearly told the tax
preparer that we need to file non resident NJ for year 2000
and resident MA. However at that time he said that as my
taxes are withheld for NJ he would file only for NJ and no
need to file for MA. He filed my tax returns only to NJ
inspite of knowing fully that the postal address on my W2
was of MA.

After almost 3 years in Nov 2003 I received a letter from MA
department of revenue that I have failed to file my tax
returns to MA for year 2000. I took the letter to H&R block
and was helped by a different preparer this time. He did
admit that it was a mistake from H&R block's part to file
only for NJ. He filed a amended return to NJ(as non
resident) and a resident return to MA.

Per his calculations I owed $3,257 to MA which I had to pay
immediately from my pocket.I'm supposed to get $2,000 back
from NJ which he said will take lot of time as its a amended
return. He also said that I would get one more statement
from MA as penalty and interest for 2 years. As this goofup
was done by H&R block he said that H&R block would
compensate me the penalty and interest.

As per his guess, I did receive a statement of penalty +
interst for around $2,200. I took this to H&R block they
said that they will reimburse this amount which will take
3-4 weeks. But they asked me to pay this amount immediately
to MA dept of revenue. Per their suggestion, I did pay
$2,200 to MA.

Today I received a call from H&R block saying that my
reimubrsement applicatiton for interst and penalty is
rejected. The reason they told me is that they got the
confirmation from the preparer that I never told him that I
was in MA for year 2000. I'm in serious financial trouble
now. I need some serious advice as to how I can fix this
problem.

I need answers to these questions before I can take any action.

1. If the address on W2 is the address of MA, then doesn't
prove that I lived in MA. Isn't that enough information for
a tax preparer to figure out how to file tax returns ? He
is now trying to save his ass by telling that I never
disclsed information about residence in MA.

2. Shouldn't I be getting back penalty + interst of $2,200
from H&R block as promised?

3. I was charged around $160 for filing tax returns at H&R
block. Shouldn't I be getting this money back as they didnt
file it properly?

4. I am waiting for $2,000 which I'm supposed to receive
from state of NJ. I asked them to loan me this $2,000 as I'm
in serious financial trouble now?

I'll pay them back once I receive this money from NJ. The reason this
money is stuck at NJ dept of revenue is because of a mess created by
H&R block.

I request all tax gurus and knowledgable people out there to
help me resolve these issues. I'm in serious financial
trouble now as I had to generate $3257+$2200 in last one
month which meant diverting all the money I had saved(since
last 1 year) for my wife's education for next one year.

Thanks a lot in advance,

Best regards,
-M

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