Gross Receipts (city hall, credit, lawyer)

[Snort]

I'm hesitant to write this because I have never "cheated" on anything, but I got stuck with Gross Receipts Tax that was slipped into a contract that I had several years back.

I sent the tax dept the IRS guideline regarding "Employee vs. Contract Hire" and I clearly was an employee, based on the guidelines. This is what NM uses to make the determination. My explanation fell on deaf ears, naturally.

What happens if I don't pay the other half of what I've already paid?
They've stuck me with significant penalties, etc. already because they didn't discover the oversight until several years later. It's another $5K, which I can ill afford.

I'm 99% sure I can't fight "city hall", but it burns me they get away with this. I was told that it would cost me $20K to fight it in court.

What I'd like to do is consult with the IRS, but I don't know if they care either.

Just to add: I paid the initial "Hurry up and pay fee", but I was later than the paltry amount of time they allowed for this "quick resolution" and then added several grand more to the bill. I think they gave me a week to pay. Didn't get it in to them in time.

[phydeaux3]

I had a similar case (slapping high fees after a very short time to comply) in Illinois, but not on taxes.

I was living in Swansea Illinois (near Belleville, not far from St Louis). My car died, so I bought a used one and got it licensed. A month later I got a notice about a ticket in Chicago. I'd been to Chicago exactly once, and that was 20 years earlier. According to their timeline the ticket was issued just a few weeks before I got the car. Obviously somebody else owed it and I had their plate number reissued to me.

I made copies of everything and wrote a letter to them showing I didn't even have the plate that was issued to at the time of issue. I sent it in 4 days before it was due (I only had 7 days to start with). Whatever happened - delayed mail, sitting in the sorting box down in the mailroom, sitting in somebody's inbox while they were doing something other than their job, deliberate delay, whatever - it was processed exactly one day past their short deadline. So they sent me another notice that was more than 5 times the original amount. I called to straighten it out and nobody would listen. It was late, which meant I owed it even if I didn't. Postmark didn't matter. All that mattered was receipt and processing. I could get a lawyer and spend even more on that, or I could pay it. Or I could ignore it and hope I didn't get pulled over for something and get hauled in (good luck with that in some parts of Illinois). But I couldn't delay too long because high interest was going to start accumulating if I didn't comply within 10 days. So I paid it. Sent certified mail.

And moved out of the state 4 months later.

I haven't so much as driven through the state again since. I never will. I figured the money I haven't spent there and the taxes I haven't paid to them made for much more revenue loss than what I was robbed of.

[Zoidberg]

Originally Posted by Snort

I'm hesitant to write this because I have never "cheated" on anything, but I got stuck with Gross Receipts Tax that was slipped into a contract that I had several years back.

I sent the tax dept the IRS guideline regarding "Employee vs. Contract Hire" and I clearly was an employee, based on the guidelines. This is what NM uses to make the determination. My explanation fell on deaf ears, naturally.

What happens if I don't pay the other half of what I've already paid?
They've stuck me with significant penalties, etc. already because they didn't discover the oversight until several years later. It's another $5K, which I can ill afford.

I'm 99% sure I can't fight "city hall", but it burns me they get away with this. I was told that it would cost me $20K to fight it in court.

What I'd like to do is consult with the IRS, but I don't know if they care either.

Just to add: I paid the initial "Hurry up and pay fee", but I was later than the paltry amount of time they allowed for this "quick resolution" and then added several grand more to the bill. I think they gave me a week to pay. Didn't get it in to them in time.

Not a lawyer here, but it sounds like your former employer screwed you by checking the wrong box, paying you as a contractor but not as an employee. It's an old story, one that's deeply familiar.

That'd be bad enough in most places, but NM makes it a double-whammy by charging GRT on services rendered.

First and easiest: Can you prove or allege that the work-for-hire was to an out-of-state client (i.e. software services?). In that case the NM Taxperson can't get her grubby little hands on it and will usually back off.

By paying anything thus far you've kinda admitted responsibility. $5k is less than $20k.

You might not be past the statute of limitations if you want to take your former employer to court with the GRT headache as damages. This would probably only make sense if you have the confidence to proceed pro se, and the ability to make it to court. Finding a local lawyer through the NM Bar Association website will help you find a free consult, but dollars to doughnuts they'll probably tell you to pay the $5k and lump the rest.

[Snort]

Thanks for the insight provided.
Although there are wonderful people in the state, they're not the ones I've encountered in the government circles.
I don't have assets to speak of and don't need to ever be back in NM.
If I just don't pay, do they have the ability to garnish wages? Ruin credit?

[funkymonkey]

Don't count on anyone in a forum to give you legal advice...