A simple tax question (Charlotte, Raleigh: lawyer, showing, vacation)

[FireballFL]

I have a couple of simple questions about the state income tax structure for North Carolina. I have lived there previously and left the state on December 26, 2003. However, the state of North Carolina states that I owe over 2000.00 in state taxes for the fiscal year 2004 taxes. To state the following:

1. I have no intention of paying these taxes because I left the state on December 26, 2003 and moved to Florida for gainful employment.

2. The pay I was receiving was severance and the first $35,000 is supposed to be tax exempt, according to the North Carolina Department of Revenue's website, however they do not want to follow this rule within their own tax code.

With these two things stated, I have proof that I obtained my driver's license the first day I was in Florida and surrendered my North Carolina driver's license. My tags were changed to Florida also. So, with this in mind, would I no longer be a North Carolina resident? I am just wondering where NC DOR's mode of thinking is. Yes, I know that the employer was housed in North Carolina, but I moved to Florida, where we do not pay any assorted state income taxes. Also, the lady I spoke with stated that I would still have to pay the taxes, based on the fact that I had employment. The problem she had though was that I did not have employment with a North Carolina employer. I was employed with a Florida employer. She also claims that I will need to ammend a tax return with North Carolina for wages earned in Florida?

To state the least, none of the gibberish makes any sense to me and now I will have to fight this out in court with them in Raleigh (Raleigh is a nice town, but I prefer to use my vacation time in Fiji or Cancun). How hard is it to believe that I left the state to live somewhere else? I just do not like the fact that I need to take my earned vacation time and come up there to show the court documents (which takes 20 minutes to verify) proving I lived in Florida for the entire year of 2004, receipts showing that my North Carolina tags were surrendered and transferred in Florida, and further documentation from my previous employer that this pay was considered severance. I also do not understand the reasoning they sent my documentation to Charlotte, NC and all revelant pieces of information there, when it was apparent, per my forwarding address that I lived in Tampa, FL? It is just confusing. If anyone can provide guidance or a better understanding on all of this, it will be helpful. Hope everyone is having a good weekend.

Editted to add, and why did it take them 3 years+ to figure out all of this? Was it some sort of way to think that I would pay and would have forgotten all these details? I am sorry if I sound a bit snippy on it. I just do not like to receive court orders and the such in the mail when it was already explained over the phone.

[kmway]

You really need to take this to a lawyer. I doubt any real good can be done here. The lawyer needs to be in dialogue with the state on your behalf.

Good luck--

[FireballFL]

Originally Posted by kmway

You really need to take this to a lawyer. I doubt any real good can be done here. The lawyer needs to be in dialogue with the state on your behalf.

Good luck--

Would you suggest a lawyer in North Carolina since they are more versed in tax law up there?

[kmway]

I would definitely say so. If it was a federal issue I don't think lawyer location would matter...but in this case you want a good lawyer familiar with NC tax laws.

[mm34b]

State residency doesn't have much to do with state income tax liability. Some non-residents are required to pay NC too. It comes down to the source of individual's income.

[FireballFL]

Originally Posted by mm34b

State residency doesn't have much to do with state income tax liability. Some non-residents are required to pay NC too. It comes down to the source of individual's income.

However the source of this income was employment separation and a severance argeement between I and my former employer in Charlotte. I remember vividly letting my employer know to continue to take out all taxes and contributions for 401k. My employer was gracious enough to give me over 4 months of severance and for that, I am grateful because that money was used to help me move, however I was informed by Payroll and Human Resources that North Carolina will not receive tax money on this. After going to North Carolina's Department of Revenue site and then looking at other sources, I discovered that North Carolina is not to receive any taxes on severance. I confirmed that my former employer reported this to North Carolina as severance. I only earned $ 12,500 for that time period and that is well under what the state mandates. Anyway, I guess I will have to get an attorney up there. I really did not want to fight this thing in court, but if I have to then I will. I will not be paying North Carolina a single dime. I did not live there the entire year and I did not file for unemployment protection with the state, which I could have legally done and got paid almost $ 500 a week on the state resident's dime and then just up and move. I did not do any of this. I could have cost the state far more than what they claim I owe them.

Thank you for those that gave me advice in the previous thread. North Carolina Department of Revenue has agreed to let this go, after involving a local, Raleigh attorney, that is well versed in North Carolina tax law and upon receiving a copy of the W-2 from my taxes, that show this is severance and not regular pay, they will finally drop it.

[mm34b]

Updated info posted in green.

[kmway]

Congratulations!

[FireballFL]

Originally Posted by kmway

Congratulations!

Thank you, I am glad it is done. It was almost $3k and I only had to pay the attorney $250.00 for her work on this. Apparently, the state will listen to attorneys.

[tarheelcoach]

The NC Department of Revenue is a joke. I cannot believe how bad they are at their job. Two years in a row I received a bill from them stating I did not pay any NC taxes from the previous year. Each time I provided a copy of the tax return I filed with them, along with a copy of my W-2. To make it worse, my employer, the ones who took these taxes out? I work for . . . the State of North Carolina!!

What a joke. Fortunately, they are quick to say "Ooops", and drop their collections.