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That sucks, but you have legal recourse and are likely to get every cent back.

We will see... I've never had to sue the government before. It seems like an extreme action to have to take after the fact. They also took a $125 'fee' out as well. I get the feeling I won't see that again. Regardless, it has left me shaken. Now, I really don't trust things at all.

On the good side, I did recently win the 4 bogus parking tickets that I've gotten in the last 6 months. So maybe I'll have good luck with this too!

Except for overdraft fees/late payment fees resulting from it, and likely no compensation for other losses resulting from having your money unavailable and for the wasted time.

Bank fees including overdraft fees are recoverable when the IRS makes an error. You have to file form 8546 https://www.irs.gov/pub/irs-pdf/f8546.pdf

Perhaps eventually.

The Feds took almost a year to pay me the $700 theybowedbmenwhen I resubmitted my taxes due to forgetting to add one item I took a loss in.

Since you post this multiple times… can you give some more details? As is this sounds highly unbelievable

What sort of details would you like? Like I have to show an anonymous person proof of this? It happened, I'm not f'cking making it up. This isn't some new HN account. Since you saw my other comment on this, you can see that others have replied to say they had similar things happen. I'm not the only one.

The IRS gives multiple written notices before taking any actions, including garnishments. It seems highly unlikely that the FTB would escalate without intermediate steps.

As I said above, I received a certified letter to an old address the day after it happened. My friend who lives at the address let me know, so I haven't see the actual letter. It is entirely possible that they sent other letters there and my friend tossed them, but they weren't certified. They also didn't notify my current address.

Nor did they contact my accountant, who I've had for 20 years now and who's address is on file as my primary address for tax related issues.

It is also odd that they pulled the funds from one of my unused accounts that I just kept around for transferring money between the US and Vietnam (Citibank is in both countries and has free < 24 hour transfers) and left my primary bank account (which had the majority of my funds in it) alone.

The taxes they say I owe were during when I was living full time in Vietnam. I was still paying my US taxes during this time as well. This isn't the IRS, it is the FTB. I didn't own a business and I wasn't in California. None of this makes any sense to me.

Did you file a CA tax return? If not, it sounds like they "estimated" one for you based on your past earnings and when you didn't pay it, they seized the funds.

You should be able to sort this out by filing nonresident returns for the years you were absent. If the state wants to contest the return, then you see them in court. Otherwise they have to refund you.

On the advice of my tax advisors, I've made a point of filing nonresident returns for multiple years after moving out of a state (and out of the USA), even if the earned amount is $0 and the owed amount is $0.

This starts the statute of limitations (where applicable) and it puts you into the bucket of "people who have filed tax returns, which we may or may not audit" versus "people who have not filed tax returns, who we may or may not think should have filed a return".

At the point where you stop filing nonresident returns, you ought to make sure you have essentially zero ties to the state. The nonresident returns you filed should have had a mailing address in a different state. Your drivers license should be from a different state (or expired). You should not be registered to vote in the state. You should not have any bank, brokerage, or other financial accounts with an address in the state. If you own a business, it should not be registered as doing business in the state. No one should be 1099'ing you at an address in that state. Anything that the state's tax board can access in their databases should point to you living elsewhere.

[Obligatory disclaimer that I am not a tax attorney and this is not legal advice. Consult your accountant or a competent attorney as your case may dictate.]

> At the point where you stop filing nonresident returns, you ought to make sure you have essentially zero ties to the state. The nonresident returns you filed should have had a mailing address in a different state. Your drivers license should be from a different state (or expired). […]

All of this rigamarole is probably necessary because there have been people in the past that were (tax) residents but tried to argue they were not to get out of paying what they owed. So now all the honest people have to jump through extra hoops because some yahoos in the past tried to 'work' the system.

Repeating something doesn't make it true ;) I actually do believe that it happened to you, but (maybe this is me coming from Germany) I can't really picture any of the context.

What even is a "franchise board"? I would assume something like a Gewerbeamt (entity to register businesses with)? Why do they have bank account data of you? How can they repossess property without a court order?

Background: I'm about to make the jump from academia to industry and in case I overestimated the value of my soul may end up in California. So low-key evaluating whether this could affect me too I guess.

But either way, it's still much better than crypto: There are recourses against state actions. At least in functional judicial states (which I guess is also a tautology xD)

> There are recourses against state actions. At least in functional judicial states (which I guess is also a tautology xD)

Unless the police harass you on the street and ~~steal~~confiscate all cash you have on hand aka "civil forfeiture" [1]. There are entire small towns that have set themselves up as essentially legal highway robbers [2], and federal agencies also like to rob people [3].

There's also a Last Week Tonight episode around it [4], it's a bit dated but still relevant.

Here in Germany, we can at least contest seizure orders because we are named the owners of, say, a couple grands in cash... but in the US, the cash itself can be named defendant, which is ridiculous but entirely legal [5].

[1] https://www.aclu.org/issues/criminal-law-reform/reforming-po...

[2] https://www.washingtonpost.com/sf/investigative/2014/09/08/t...

[3] https://ij.org/press-release/highway-robbery-in-reno-nevada-...

[4] https://www.youtube.com/watch?v=3kEpZWGgJks

[5] https://www.washingtonpost.com/opinions/george-f-will-the-he...

> What even is a "franchise board"? I would assume something like a Gewerbeamt (entity to register businesses with)? Why do they have bank account data of you? How can they repossess property without a court order?

Franchise board is the California tax agency. Yes, they have bank account tied to a person since that's where they deposit any refunds (or extract any payments they see fit if you don't pay by other mechanism). They'll certainly take money without any court order, they are the tax man and do whatever they want.

The story is very plausible, that's how they operate.

You're trying to apply german logic to american bureaucracy. They don't overlap.

I can relate to your confusion a tiny bit, especially since you want to move here. When I was in Vietnam, a lot of people I interacted with have the dream of moving to America. Unfortunately, they just know what they see in the movies. They don't realize the harsh realities of things like the complexity of paying taxes. In Vietnam, it comes directly from your paycheck and there is VAT. There is no concept of State and Federal level taxes. Even better, you don't need to hire an accountant to do these things for you because if you mess up (and the system is designed to mess you up), it can get a lot more costly. Even with an accountant, it seems I'm not immune.

When I came back to America (not by choice, I got stuck here at the start of covid and VN shut its borders), this is also why I established residency in an income tax free state. I had to get a physical address, drivers license, car registration, etc... it was a lot of work.

My suggestion? If you're going to come here, do more research first.

I'm sorry that happened to you. That really sucks.

However, this happens more often in crypto. It is much safer to use a regular bank.

It isn't about frequency, it is about possibility.

Source for your "more often" comparison though? Certainly people have had their wallets drained because they handed out the keys or stored their stuff on a centralized exchange, but that's not a lot different than a regular theft.

I don't know of anyone who's had a crypto wallet drained by a third party where the wallet was secure.

> don't know of anyone who's had a crypto wallet drained by a third party where the wallet was secure

Bit of a tautology.

> I don't know of anyone who's had a crypto wallet drained by a third party where the wallet was secure

This is going back to the rsync v Dropbox discussion.

Yes, those who know all the steps necessary can spin up their own encrypted file sync server. 99.5% of the remaining user base will use Dropbox or some other managed solution.

Same with Coinbase and all the other exchanges. "nOt yOuR kEys" is not a good argument when there are millions going into ads and influencer videos pitching Coinbase as the de facto crypto equivalent to regulated brokerages. On Robinhood, people don't move their funds back to their bank acct after every single transaction and they don't expect to do so in crypto either.

So simply using a program as it was designed is, "asking too much?"

At that point you can't blame the devs or anyone else involved except the users.

If it is difficult to use or poorly designed, then yes.

California residency is defined by an “intent to return to the state of California”. That intent is decided by the FTB not you.

Living overseas is particularly tricky because they want to see that you’ve established another state in the US with a stronger connection than California. If not, you remain a California resident. Yes, that sounds crazy

The state publishes a brochure with something like 40 criteria used to make the determination. Receiving mail inside the state is one indicator

https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf

“You can check out any time you like, but you can never leave”

> “You can check out any time you like, but you can never leave”

Thanks. That's crazy. I was already out of the country for 2 years before the period they are claiming that I owed taxes (and I was even paying taxes while I was gone)!

I guess this is going to be a fun battle, sigh.

When I left California, the FTB went after me for extra taxes on the time I was in California.

Kind of like a final “fuck you.”

There's a story on the front page of HN right now [0] about a cryptocurrency that decided to enact some form of emergency powers to save itself and is now claiming to reverse said vote. This exact situation can and does happen with crypto.

[0] https://news.ycombinator.com/item?id=31806191

I gotta ask you, because this has been eating me since I read it. It appears you've been on HN even longer than me, so I trust you know what you're talking about. I left California in 2006 and moved overseas, never established residency in another state, lived outside the country for 12 years before coming back and establishing residency in Oregon. During that time I did file federal taxes, but most of my income fell under the foreign earned income exemption (< $95k when I left). I did pay social security. But I was no longer considering myself a California resident. Are you saying that California is now trying to claw in taxes from people who left the state 16 years ago and earned foreign income, if they didn't immediately establish residence elsewhere in the US? -- FWIW, I did also skate on visas for those 12 years and never established permanent residency in another country, but nonetheless I wasn't living or making money in California, or intending to return there.

My accountant (who is really an EA) sorted it today. She has a special (paid!) phone number that goes direct into the FTB/IRS.

Apparently, they have been having "computer problems" and have been sending out letters to people who don't actually owe any taxes (because I've been f'cking paying my taxes), like me. I'm not her only client that got jacked by this.

I'll be getting a full refund, including fees, in 4-6 weeks.

Well, that's great news! Thanks for the follow-up.