I suspect that PA decided to balance the state budget through a unique program of selectively finding tax-payers throughout the state and sending them notices of small taxes due for prior years. For example, I received a notice that I owed something like $137 from 2007. I checked my return copies, checked with my tax preparer, and sent a letter of disagreement back to the PA Dept. of Revenue, stating I did not agree, and could you please explain the reason for this letter?
In return for not paying the $137 supposedly-owed tax, I received another letter, stating I owed around $400 in unpaid taxes from 2008. I sent this letter back with another letter of my own, disagreeing (once again!) that I did not owe this additional tax, since the state saw fit to increase my income on their paper, but failed to actually let me have the money they say I earned.
In return for not paying the $400, I received yet another letter, this time saying I owed $3500, because they were disallowing all the taxes I paid in 2006 to another state, where I worked in 2006. To that letter, I replied with copies of my tax returns, showing the non-resident return, the PA Schedule G-S, etc.
All the while, I had not received any acknowledgment of the other letters I had sent. I tried calling their telephone number, over a dozen times in one day – busy signal every time.
Finally, I received a letter telling me, in effect, yup, I was right, I did NOT owe them them $400. Well, there’s a nice surprise. Hey, they got one right.
Then, I received an Assessment for the $3500, with instructions on how to appeal. Which I have. <- (Princess Bride reference)
So my question, gentle reader, is this – does it seem like the state of PA decided to send out some small “you owe us some back tax” notices to say, a million PA tax-payers, with the hope that most would just pay the bill and forget it? Is this a sly way of balancing the budget? What if I HAD paid the first erroneous tax bill? Now I would be expected to pay the rest, wouldn’t you think?
So lesson for the day folks: keep good tax records.
Peace – Chester