Taxpayer Pays Wrong State

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#1
CP Hay  
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Here's the situation. Taxpayer paid estimated tax, in error, to state where he formerly resided. The tax return fee will be just as much, if not more, than the erroneous payment. How would you handle the situation? Would you tell the client not to file the return? Or would you file the return and charge the normal fee?
 

#2
CathysTaxes  
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Taxpayer made the mistake, I would charge. One time in a similar situation, hubby, the official owner of our business, decided to be a nice guy and get involved for free. Taxpayer's situation? State applied estimated tax to the wrong year and then refunded. Hubby told him to let it go and cash the check. Taxpayer decided to return the check because he wanted it applied to the next year's estimated tax payment. Hubby contacted the state, wrote letters, etc. Then he got me to do the same. The state never applied it and he never got the refund. If hubby was charging, the two of us wouldn't have spent a lot of time on this because I believe client would have given up after a few phone calls.
Cathy
CathysTaxes
 

#3
ATSMAN  
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Here's the situation. Taxpayer paid estimated tax, in error, to state where he formerly resided.


When did the taxpayer pay the wrong state before you were engaged or after?

If this were my new client I would file gratis to request refund as a gesture of goodwill. It may be a very small price to pay for a better working relationship. :)
 

#4
CP Hay  
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Location:
NEW YORK (NY)
ATSMAN wrote:
Here's the situation. Taxpayer paid estimated tax, in error, to state where he formerly resided.


When did the taxpayer pay the wrong state before you were engaged or after?

If this were my new client I would file gratis to request refund as a gesture of goodwill. It may be a very small price to pay for a better working relationship. :)


After
 

#5
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If you specifically told the client to pay state A (and/or provided a voucher for state A), and he paid state B, that's the clients fault.

I would advise the client to:

-First pay state A like he was supposed to.
-Second call state B, explain the situation, and see if there's some remedy that doesn't require a return filing. You never know.

If there's no remedy, file a non-resident return in a few months and request a refund. I would have to weigh whether or not I'd charge for the non-resident return. Things I might consider would be the fee level he's already paying, whether or not he's a referral, whether or not he's pleasant to deal with, my expectations about how long he's going to be a client, etc.

Regardless, I would tell him now, if a return is required to be filed, that I'll prepare and file it -- no problem, and it won't be too expensive...a nominal fee. Then, you can make the decision what to bill once everything is wrapped up.
 


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