

It could happen to you too - drunkpotato
http://digbysblog.blogspot.com/2013/02/chase-just-handed-over-all-our-assets.html

======
ChuckMcM
Sigh. I understand the angst, tax organizations are the worst. However, a
piece of advice.

If you file a tax return in a state, and then you leave. Make sure you file a
tax return the next year as well but put down zero taxable income.

What I have seen states do, is take the last year you filed a return "presume"
you made that much in the next year but just "forgot" to file, and then charge
you for back taxes. You counter this behavior by filing a $0 tax return so
that the last year on the books you made $0 and when they use the last year
you filed to compute your 'expected' return for the current year they will
start with $0. A CPA friend suggested that you continue this for three years
as that was the 'average' over which they might make a computation.

Either way, its a pain. But filing a state return with $0 on it is pretty
straight forward thing these days with efiling.

~~~
Zimahl
_But filing a state return with $0 on it is pretty straight forward thing
these days with efiling._

It's stupid to have to do that. They shouldn't be estimating your income, they
know exactly how much you make from your W-2s, 1099s, etc. This is all to be
reported to the state by an employer.

As for the guy in the article, there isn't something quite right. The state
could be completely wrong here but there is something fishy with his ownership
of part of a business in MA. If everything is as he says is true and the MA
tax lawyer isn't getting this settled, he needs to get a different lawyer.

~~~
ChuckMcM
Two part response:

 _"It's stupid to have to do that."_ \- yes it is. However, as the author
points out, states are broke, so they do everything they can to maximize
revenues. (California is horrible at this, they twiddled two of the digits in
my social security number and the first I heard about it was a tax lien filed
against my house, really sad.) For a long time not filing a tax return
effectively deferred your tax liability until you did. They aren't willing to
wait that long any more.

 _"As for the guy in the article, there isn't something quite right."_ \- Of
course not, tax stories like this are always more nuanced than the 'victim's
point of view. Combined with the common practice of "interpreting" the
statutes to mean one thing or another, its what keeps tax attorneys gainfully
employed.

Of the latter my favorite is the "home business" or "hobby" interpretation.
Your home business of shipping coal to New Castle may be losing money year
after year, but the IRS doesn't technically get to call it a hobby, even if
there is no evidence to believe it will ever make any money. People abuse that
"loop hole" all the time, it is an opinion of whether or not its a "business"
and the IRS isn't technically allowed to make judgements along whether it is
or isn't. That doesn't stop them from trying to intimidate people though.

~~~
AJ007
It is bad behavior by the states, high income earners explicitly avoid ever
residing in certain areas that are notorious for long term harassment -- even
when they have zero problem with the tax rate itself.

Several states are playing the all in card on their expenses, because they
know when there is a real financial crises its much easier, politically, to
purge excess expenses (The Federal government is doing this too I think.) The
more they spend today the quicker that day arrives.

------
nathantotten
A similar thing happened to me about 4 years ago in California. At the time I
was running a small business and we had several thousand dollars withdrawn
from our Wells Fargo Checking account along with a $200 Well Fargo legal fee.
After some investigation we discovered that California had sent a notice to
Wells Fargo to seize our assets for unpaid taxes. The Wells Fargo legal team
was fairly helpful and they told us that 'this happens all the time', meaning
the state doesn't really care who they take the money from as long as they get
money from somebody. It took us nearly 2 years to prove to the state that they
had the wrong business and we we able to recover the money from California.
They paid us something like 0.25% interest. We never did get the $200 back
from Well Fargo. All of this happened without a single notice or letter from
either California or Wells Fargo.

------
caseysoftware
Austin-based developer evangelist here..

If your wife needs a hand, don't hesitate to drop me a note. I'm happy to do a
grocery run, make introductions, or whatever.

------
chris_wot
"And I'm one of the lucky ones. We use a foreign bank for the vast majority of
our assets, and keep only a small amount in Chase for bills and such."

Section 319 of the USA PATRIOT Act specifically allow for the seizure of any
money in Interbank Accounts held in the U.S... You may not be safe.

18 USC § 981(k) is the specific part of the U.S. Code that deals with this.

I knew that spending two years reading about the Patriot Act and writing it up
on Wikipedia would be useful one day...

------
whalesalad
This happened to my dad recently. All accounts frozen. For $22 in unpaid taxes
due to a discrepancy.

The funny part is that you can't write them a check for $22 when all of your
accounts are frozen. #recursion

To everyone who is alarmed by this it actually happens a lot and is not
necessarily Chase's fault. A lot of banks do this. Blame the IRS, our large
government, and their incessant need to take everything from everyone in order
to pay for all the social programs we don't need. Okay I didn't really need to
add that last bit .. don't want to start a big war on HN with my political
viewpoint.

~~~
cpressey
More specifically: #deadlock

~~~
tankenmate
Actually; #livelock

The world doesn't stop because you can't pay your taxes (the fines don't stop
either unfortunately!).

------
gyardley
Yeah, been there and done that.

Me: "I didn't live in your state or earn a dime in your state the year you're
claiming I owe you thousands of dollars in tax. Shouldn't you have a shred of
evidence that I owe you money before you send out a bill? Why should I have to
waste my time proving that I _don't_ owe you money, instead of the other way
around?"

Minion at the California Franchise Tax Board: "That's just not how it works,
sir."

Happened again when I moved from New York to New Jersey, and I fully expect
it'll happen again this year, since I moved from New Jersey to Texas.

And people wonder why I moved to Texas.

------
aneth4
My personal and business banking is done at Chase. I've found them to be
fantastic and managed to avoid pretty much any fees by following the guidance
of very helpful employees. I know everyone loves to bag on big banks, but
Chase has been great. Bank of America is another story - their website barely
works.

That said, I highly recommend anyone with significant assets open a bank
account in a foreign country where seizing assets is much more difficult. Keep
a reasonable sum there and know how to transfer the rest quickly if you fear
legal action.

~~~
gcb0
> and managed to avoid pretty much any fees by following the guidance of very
> helpful employees

shouldn't they not have useless fees to begin with?

~~~
jmj42
I'm not sure the fees are _necessarily_ useless. Banking is a service, and
services cost money to provide. I suppose an argument can be made that the
fees are higher than they need to be, but then, banks aren't non-profit
entities either.

As for me, I've been a Chase customer since 2004 when they merged with Bank
One, and a Bank One customer since 1990. I've tried a few local and regional
banks, and brief stint with BOA as Bank One didn't have any branches in San
Jose circa 2002. I've been quite happy with my Bank One/Chase experience to
date. Far more than any other bank if tried.

~~~
gcb0
an uncle that worked too long on banks used to tell that when he started, he
would be writing mainframes applications to calculate the 'cost' of a client
for the bank. Basically, the bank would give the service as an investment to
get the client money, and make money investing that money.

At some point banks started to charge for services and nobody could live
without banks anymore, so he was writing cliper86(?) scripts to discover the
'profit' of a new client.

------
citricsquid
Apparently this is written by the co-founder of Ars Technica.

------
patmcguire
It's a common thing to not exactly give notice of proceedings despite the
legal requirement.
<http://www.nytimes.com/2009/12/31/nyregion/31debt.html?_r=0> Would like to
think that Massachusetts is more scrupulous, but maybe it's one of those
"we'll keep our hands clean by demanding more of process servers than is
humanly possible and pretend to be shocked when the inevitable happens" kind
of things.

------
epoxyhockey
What is the statute of limitations for tax issues in Massachusetts? I looked
it up, and it appears that there is an _unlimited_ amount of time that MA can
come after you: [http://www.mass.gov/dor/individuals/filing-and-payment-
infor...](http://www.mass.gov/dor/individuals/filing-and-payment-
information/guide-to-personal-income-tax/administrative-tax/statute-of-
limitations.html)

However, using the technique that ChuckMcM described, that limitation would be
6 years. Sounds like we should start filing $0 returns for states we don't
reside in anymore..

------
TillE
Well, there's yet another good reason to stick with local credit unions
whenever possible. If they have no presence in another jurisdiction, they're
unlikely to comply with any of that nonsense.

~~~
mikhael
I use a credit union, and I have been the victim of a similar problem as the
author, and the credit union folded in exactly the same way. Notably, the
credit union is local to a state different from the one that tried to shake me
down. I don't especially blame the credit union, though: they were upfront and
communicative with me, and told me that their hands were tied.

The advice I was given (not by the CU): either withdraw all my money from the
account and put it in a safe deposit box, or wire it to a ( _very_ ) close
relative ASAP -- _before_ the lien is officially issued.

~~~
niggler
"withdraw all my money from the account and put it in a safe deposit box, or
wire it to a (very) close relative ASAP -- before the lien is officially
issued."

IT is generally too late. Both are problematic and can be clawed back
relatively quickly (the timing looks suspicious, etc). Yes, they would have to
take you to court, but the defense costs usually exceed the asset value (and
the author notes this).

~~~
mikhael
The state actually gave a fair amount of advance notice. I was given an exact
date for when the lien would go in effect, with over a month of lead time, as
I recall.

I'm a little too paranoid to say exactly what I did, but I will say that I'm
glad I was given that advice. (I was younger, and had much less money saved at
the time; obviously that amount would affect any similar decision now.)

------
niggler
You should always have assets at multiple banks and have lots of cash stored
outside of the banking system (in a safety deposit box, at home, in car, etc).

*note: be careful about how you accumulate said cash. CTRs are generated if you withdraw too quickly.

~~~
oasisbob
_note: be careful about how you accumulate said cash. CTRs are generated if
you withdraw too quickly._

This is very bad advice, as it's illegal in the US to intentionally evade CTRs
by aggregating smaller transactions. It's known as structuring:

<http://www.irs.gov/irm/part4/irm_04-026-013.html>

Also, CTRs aren't inherently a bad thing, and they aren't generated behind
your back. If you hit the $10k reporting limit, it's a simple one-page form,
and you're on your way. Legitimate businesses are required to complete them
all the time.

Suspicious Activity Reports (SARs) are filed at the discretion of the
institution, are secret, and are independent of the transaction amount.
Withdraw $9,990 and you'll probably have a SAR under your name instead of a
CTR. Ditto if your deposit smells like drugs, or if you're dealing in large
amounts of currency as an individual, and the bank staff can't determine why.

~~~
niggler
If you are interested in taking out 100K this year, nothing is illegal about
withdrawing 2K per week as opposed to taking out 100K at once.

~~~
oasisbob
Unless you're doing it evade reporting requirements.

Taking out 100k in currency within a year will look very suspicious --
financial institutions run regular look-back reports designed to find this
kind of thing.

Were a bank officer to ask, I don't think there's any problem with telling the
truth, "I'm stockpiling currency, and am contributing to this stockpile on a
regular basis to coincide with income."

------
axusgrad
Interesting; I finished A Handmaid's Tale last week, and the same thing had
happened to the main character's family. Everybody had stopped keeping cash,
and without their bank card working they were powerless.

------
HNaTTY
Similar thing happened to me, but with a much happier outcome. I lived in
Iowa, moved to Colorado for a few years, and now I'm back in Iowa. I received
a letter that I owed estimated taxes plus interest and penalties and...
Ignored it. Then, 6 months later, I got a bill with the email address of the
Iowa IRS agent.

One friendly email and four days later, her response was:

Thank you for your response to the Department’s billing notice you received
for no record of an Iowa individual income tax return on file for tax year
ending 12-31-2005. Per review of your 2006 Iowa return I have verified you
claimed a part-year Iowa credit therefore please consider this matter
resolved. I am in the process of revising your billing to zero. You may
continue to receive notices until our Accounts Receivable as officially
cleared the billing.

If you have any other questions please feel free to contact me directly. Thank
you for your attention to this important matter.

~~~
jessaustin
Yes both Missouri and Hawaii have handled my moves in this fashion. At first
they assume you owe them money, but if you provide documentation for where you
were living and when then they cancel proceedings with no fuss.

I'm not sure how I was able to escape California without dealing with this,
but that was some years ago...

------
rograndom
I had a somewhat similar experience last year.

The IRS sent me a letter saying that they found I had mis-stated income from
one of my freelance gigs. They said their records show that I was paid
$800,000 for the job but I only claimed $800. I now owe ~$450k in back taxes
along with daily accrued interest and penalties, we have enclosed a envelope
for you to mail a check, etc.

I checked my records and I was indeed only paid $800 for the job. I checked
with the company to make sure they didn't make an error when they filed their
takes, nope, $800 the whole way.

Within days I had IRS agents calling both mine and my wife phones, calling
previous employers, showing up at my house looking to put me on a payment
program.

Our state and federal tax returns were held up and applied toward the "debt".

I'm sure that if I had a bank account tied to my SSN that those would be
locked out as well.

It took 6 months and $3500 for a tax attorney to go back and forth with them
over every single dollar on every 1099. They would literally go down the list
and say "Thank you for bringing '$1099' into compliance, but we have found a
discrepancy with '$1099 + 1', please submit a payment of $payment along with
daily accrued interest and penalties".

------
jmvoodoo
You may be able to sue the state of MA in CA court. At least one person did
this to California after moving to Nevada:

<http://www.hgexperts.com/article.asp?id=5410>

Granted, it was the state of Nevada, and Nevadans hate taxes and probably
loved sticking it to California more than anything. (which is one reason I
moved there from CA).

------
yooy123
Fucking IRS.

I must say I always paid taxes and never had problems with them. 2008 I made
some nice stock trading profits. Paid taxes for them all to the last penny.
Actually, I taxes more than I had to, since the bank statement reported higher
profits that actually occurred (must be a real gypsy bank). What the bank
statement did not report, was the buy and sale of an ETF. I held it for 3
months, made maximal 1% profit of it. The IRS became aware that I sold this
ETF, but they could not figure out when and for how much I bought it. Hence,
they assume, the sales price is 100% profit. Not they want: * back taxes for a
profit that never occurred * Fine me since I did not pay taxes for this profit
that never occurred. * on top of that, want interest for this whole cluster-
fuck.

I did not receive some letters from them since I was abroad because I was
totally broke. I have no idea how I can pay this. It makes me also think that
I might have to go offshore. I have to save urgently for retirement and just
can not afford that the IRS pulls some random gypsy charges out of nothing.

~~~
vellum
You don't have to go offshore. The same thing happened to me. What you need to
do is get an accountant or get a copy of Turbotax for that year. Then you
enter in all your info and make sure you fill out Schedule D. They'll give you
the person's (examiner) name on their letter. I filled out a new tax form, and
sent the letter below to the IRS. A few weeks later, they said "Thanks for the
info, and we'll contact you if we need anything else." That was a few years
ago. Haven't heard anything since.

\-------------------------------------------

Dear Examiner:

I have attached a Schedule D form, which I did not include in my 2009 tax
return. According to the CP 2000 letter, the securities income reported to the
IRS was $xx,xxx. But this was using a zero cost basis for stocks sold. The
schedule D form I have included provides the cost basis for all stocks sold.
The final total for the Schedule D shows a net loss of $xx.

Sincerely,

xxxxx

------
obviouslygreen
The title suggested to me that Chase had handed over the writer's assets _to_
the writer... reading the article, it's exactly the opposite of a happy
ending.

Not surprising, but alarming. More alarming, I think, is that it's not
surprising.

------
tapatio
Do not use these companies:

Chase bank or American Express

They will turn there back on you when you need them most. I had a horrible
experience with both back in 2008 when the economy was collapsing. And no, I
don't have crappy credit.

------
geuis
I never had that scale of problem with Chase, but had enough smaller
interactions over the years that I jumped last year. I started as a Washington
Mutual customer years ago. Putting aside the massive mismanagement going on at
the top, their customer service was impeccable. I couldn't have been happier
until they went under and got bought my Chase.

I've been a Charles Scwab customer for the last 2 years. Great bank. Excellent
customer service, ATM fee refunds each month, direct tie-in to investment
accounts if you do that. Highly recommend them if you are looking to switch.

------
joedev
Why does the author keep hounding on "Again, I have not lived in MA or earned
income in that state since 2003"? It sounds like MA isn't after anything to do
with residency or wage income.

~~~
dthunt
In fact, that's almost certainly what it is.

They see in 2003 they had a return that owed some money, and no return in
2004, so they assume that the same taxes are due from 2003. Then they do it
again in 2005...

This is what happens when your state doesn't have official move-out
procedures, etc. They don't know, and they don't mail you until 15 months
after you move, so your mail is no longer forwarded, and they make no attempt
to contact you a lot of the time.

------
fnordfnordfnord
Wells Fargo has a similar give-your-money-away-to-any-semi-legit-looking-
official-who-comes-knocking policy.

I have a nice small town bank. The VP knows me by name, goes to my wife's
church (whisky-pagan). I know where he lives. ATM fees? None, the bank doesn't
own an ATM, and refunds any fees I pay for using ATMs at any other location.
Makes it a lot harder for things like that to happen, or at least I hope it
will, if it ever comes to that.

------
shail
These are some of the times I feel lucky to be in a developing country. Our
government is still behind in developing laws where they freeze all your bank
accounts on income tax evasion counts (obviously unless you are a high profile
case).

But this is plain ridiculous. Its must be some kind of breach of basic rights.
Govt should not be able to freeze accounts unless proven guilty in court.

------
mark_l_watson
It helps to distribute accounts between one major bank and one or two local
credit unions.

The only problem is that you need a fair amount of money in each to get
'perks' and reduced fees.

------
mozboz
Bitcoin.

I don't underestimate the difficulty of Bitcoin becoming a viable tool to
transact daily life, but this is something that could not happen with Bitcoin.
If nothing else, the fact that Bitcoin provides a fundamentally different way
to transfer value, independent from state or corporate interference shows that
there are potential alternatives.

------
LandoCalrissian
Credit Union, you will be better off.

------
chimeracoder
The title seems ambiguous (and, oddly, does not match the blog post title).

Did Chase bank hand over all _Massachusetts_ assets (all assets in a MA
account) to the state, or did they hand over non-Massachusetts assets to the
state of Massachusetts? The opening of the article implies the latter, since
the account was opened in Illinois, though it's possible that the account
qualified as an MA account.

Even if the address on the account is listed as a California address, the
account may still be a Massachusetts account (use an MA routing number, etc.).

I'd be very interested to know if Chase handed over assets from an _Illinois_
account to the state of Massachusetts.

~~~
largesse
I suspect that there's no such thing as an _Illinois_ or _Massachusetts_
account to Chase. They are all just accounts held by clients who are US
citizens.

~~~
rdouble
Bank of America in NYC is a different entity from B of A in California. Same
with Wells Fargo. The accounts are geographically tied to the state in which
they were opened. Chase is probably set up the same way.

------
eqreqeq
Without more details the whole story sounds iffy. Since he did not give us
more details but still shared his story I will speculate that he took
advantage of what he thought were some clever tax loopholes in MA. Remember
that hid did state very passingly that he has a presence in MA. Specifically
this:

>>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 in essence, he probably took advantage of some iffy tax loop hole which the
state now probably disagrees with and is asking for whatever it thinks it is
owed.

~~~
rtpg
As with all these stories, need to be taken with a nice handful of salt.
Owning a business in MA would make it seem like you would qualify for state
taxation (on that part at least).

The US taxes its citizens even outside of their own jurisdiction. It wouldn't
surprise me if MA taxed people that still made money in MA.

~~~
bconway
All states (that have an income tax) do. I own property, which I rent, in
multiple states including MA. I need to file tax returns for the income I make
in each of them. Nothing unusual there.

