“I got an email from Chase saying that all our assets are frozen”

So random that this has popped up now. I should post an update, but I can do a quick one here. This is resolved, but here are the bullet points of what happened and what I learned:

- All of my assets were not frozen. 99% of our assets are with Barclays, and we just use Chase so that we can have a local checking account. (Barclays doesn't do that in the US.) So everything tied to Chase and our credit cards were frozen because of the tax lien.

- The source of the problem was my former CPA. He just screwed up. He's a nice guy who does a solid business in the decent-sized midwestern city where he's located, but for whatever reason of inattenion and/or lack of good enough training/information, he had me file in the wrong state. He also doesn't have any insurance (not required where he practices), so if MA hadn't been cool about waiving penalties and interest it may not have been possible for me to recover that from him by the time I paid legal fees, etc.

- I got a great MA tax lawyer (Philip S. Olsen, now of Burns and Levinson), and he worked with the Mass. tax authorities to help them understand that I wasn't some seedy tax dodger and that this was the fault of my CPA.

Now, here's what I learned:

- Ask your CPA if he or she has insurance, and for how much. Don't be shy, because this kind of thing could happen to you. And don't think that just because various professionals and bigwigs in town use them, that they're either not going to make a mistake or that they have insurance.

- There is no bank or credit union, no matter how foreign or local, that would not have frozen my assets in response to the merest hint of a request from MA. Every financial institution in the world is going to roll over for a state government like that, and leave you to sort out of if the request was legit or not. There's no place to hide. So Chase isn't actually the bad guy here.

- MA isn't really the bad guy either. The states are strapped for cash, and they're turning over every stone for revenue. What caught my CPA was a wrinkle in the tax law about where to file that for decades many CPAs ignored because the states didn't have the ability to find and go after such things. (MA was claiming that I owed "Massachusetts-sourced income" because Ars Technica LLC was technically headquartered in Malden.) But in today's world of desperate state governments and networked databases, no CPA can afford to be lazy about anything. To their credit, MA let me re-file and did not penalize. I had to pay state taxes twice for that year, though, because IL's books were closed for 2007 and they refused to even consider giving me back the money I erroneously paid them.

- This stuff drags out. While our assets were unfrozen pretty quickly, it was the first week of this month that I finally got a letter from MA telling me that the tax lien was officially lifted and that I'm in the clear.

- There is no statute of limitations on taxes. If they find something from literally 20 years ago, they can load it up with penalties and interest and absolutely crush you. So see the point above about making sure your CPA has a platinum-plated insurance policy.

If you're wondering (like I was) why MA thinks this guy owes anything at all, it's buried in the middle:

"Again, I hadn't lived there or worked there since 2003, but I did own part of a business that was headquartered in MA, and the state was using this fact to harass me for income tax money."

So is the MA tax bill based on the profits of that business, or is the state just using it to say "you should pay all your income tax here"? Regardless, his beef should be with MA rather than the bank. I'd hardly fault Chase for complying with a court order - if crossing a state line made you judgement proof, why wouldn't everyone just run up debts, move one state over, and start fresh?

This post was from 2013. Has anyone heard from the author what might have happened lately?

I've had something similar to this happen with another state agency (not the state in which by business is incorporated). We had opened a tax account in another state as we intended to convert a contractor to an FTE, but we ended up terminating the worker's contract. Time passes, and Chase processes a levy on behalf of a collections agency authorized to collect for the state department of revenue. They had automatically been calculating tax owed for one FTE, even though we had never filed a statement indicating we were withholding. Then fees, interest, penalties, etc. added up and it made for a very bad day or two here.

It took a few calls between us, Chase and the state agency, and a simple form to get the levy order rescinded before Chase fulfilled it (30 days after their receipt, for most such orders). Our funds were released within minutes of calling them to confirm that the state sent them a fax rescinding the levy order.

I've heard numerous horror stories about dealing with Chase on matters like this. I didn't find those stories to be true, in our case. I suspect the author either handled it (one would hope), or closed his tax account and chalked it up to lessons learned (a regrettable, but understandable decision to avoid further anguish and just "be done with it").

I like how this is from 2013 and yet there is still no update on that blog, the linked blog, or anywhere else as far as I can tell...

Cached: http://webcache.googleusercontent.com/search?q=cache:u4KJzfI...

This gives me yet another good reason to keep BECU[1] as my only bank for any non-trivial amount of money... it can be a pain if I need an ATM, but I can at least trust that they will generally be on my side.

[1] https://becu.org

FTA:

> Every financial institution in the world is going to roll over for a state government like that, and leave you to sort out of if the request was legit or not. There’s no place to hide. So Chase isn’t actually the bad guy here.

I don't see the logic here. Everyone does it, so it must not be bad? I don't agree.

Yeah, some of the state revenue agencies move very quickly. NY claimed to have sent a notice (prior to their rather good online system they have today) and 14 days later they had taken the money.

Recently I've noticed a lot of very small bills originating from adjustments on years-old returns. These are things that probably should be disputed, but they are coming in at $100-$200, which is far less that I'd pay someone to research for even an hour.

Here's my question: if the revenue department is going to make rounding-error level adjustments, why don't they just send me an advance tax bill, with all of the calculations that I can verify, and I'll just pay it?

Since the site is now down...

Original text is published here: http://digbysblog.blogspot.com/2013/02/chase-just-handed-ove...

The author mentions he keeps his money in a foreign bank that I presume the MA department of revenue cannot get at. Does anyone have any recommendations of overseas banks that are easy to open accounts with without travelling to said country.

Strangely enough, almost this exact same thing happened to me.

Apparently I was accountable for my ex-wife's tax bill (for a year in which we were not married) well after our divorce...in a state I never worked in.

what was the part about keeping all their money in a foreign bank? that seemed random.

I wonder what else is going on?

Honestly, the older I get, the more tempted I am to attach a safe to a corner of my house, close my bank accounts, and just store cash in the safe.

I heard somewhere that when you stop living in a certain state (say California in mid 2014) you should still file state tax in California in 2016 to show that you made no income in 2015 in California. This is supposedly a recommended way to end your 'relationship' with the state.

Can anyone confirm this please?

Could someone confirm that in this case using local small credit union would give certain protections in similar cases? i.e. credit union with branches in your home state only vs. having branches in most states like Bank of America or Chase does?

It's shit like this that makes me want Bitcoin or one of the alternatives to succeed. I don't care if it ends up being worth $10 or $50K, as long as many people use it. The banking system is rotten to the core.

This is from Feb 2013. Was there ever any resolution?