
“I got an email from Chase saying that all our assets are frozen” - luu
http://jonstokes.com/2013/02/24/it-could-happen-to-you/
======
jonstokes
So random that this has popped up now. I should post an update, but I can do a
quick one here. This is resolved, but here are the bullet points of what
happened and what I learned:

\- All of my assets were not frozen. 99% of our assets are with Barclays, and
we just use Chase so that we can have a local checking account. (Barclays
doesn't do that in the US.) So everything tied to Chase and our credit cards
were frozen because of the tax lien.

\- The source of the problem was my former CPA. He just screwed up. He's a
nice guy who does a solid business in the decent-sized midwestern city where
he's located, but for whatever reason of inattenion and/or lack of good enough
training/information, he had me file in the wrong state. He also doesn't have
any insurance (not required where he practices), so if MA hadn't been cool
about waiving penalties and interest it may not have been possible for me to
recover that from him by the time I paid legal fees, etc.

\- I got a great MA tax lawyer (Philip S. Olsen, now of Burns and Levinson),
and he worked with the Mass. tax authorities to help them understand that I
wasn't some seedy tax dodger and that this was the fault of my CPA.

Now, here's what I learned:

\- Ask your CPA if he or she has insurance, and for how much. Don't be shy,
because this kind of thing could happen to you. And don't think that just
because various professionals and bigwigs in town use them, that they're
either not going to make a mistake or that they have insurance.

\- There is no bank or credit union, no matter how foreign or local, that
would not have frozen my assets in response to the merest hint of a request
from MA. Every financial institution in the world is going to roll over for a
state government like that, and leave you to sort out of if the request was
legit or not. There's no place to hide. So Chase isn't actually the bad guy
here.

\- MA isn't really the bad guy either. The states are strapped for cash, and
they're turning over every stone for revenue. What caught my CPA was a wrinkle
in the tax law about where to file that for decades many CPAs ignored because
the states didn't have the ability to find and go after such things. (MA was
claiming that I owed "Massachusetts-sourced income" because Ars Technica LLC
was technically headquartered in Malden.) But in today's world of desperate
state governments and networked databases, no CPA can afford to be lazy about
anything. To their credit, MA let me re-file and did not penalize. I had to
pay state taxes twice for that year, though, because IL's books were closed
for 2007 and they refused to even consider giving me back the money I
erroneously paid them.

\- This stuff drags out. While our assets were unfrozen pretty quickly, it was
the first week of this month that I finally got a letter from MA telling me
that the tax lien was officially lifted and that I'm in the clear.

\- There is no statute of limitations on taxes. If they find something from
literally 20 years ago, they can load it up with penalties and interest and
absolutely crush you. So see the point above about making sure your CPA has a
platinum-plated insurance policy.

~~~
boomzilla
On the last point, if the CPA retired 10 years ago, and some state government
(e.g. CA) comes after you, does the CPA's insurance still work?

~~~
jonstokes
No idea. I thought of that question right after I posted it, as well. I'm
assuming it does, but I should look into that. Like, if he quits paying the
premium, does it just go away and then you're still screwed?

------
patmcc
If you're wondering (like I was) why MA thinks this guy owes anything at all,
it's buried in the middle:

"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 is the MA tax bill based on the profits of that business, or is the state
just using it to say "you should pay all your income tax here"? Regardless,
his beef should be with MA rather than the bank. I'd hardly fault Chase for
complying with a court order - if crossing a state line made you judgement
proof, why wouldn't everyone just run up debts, move one state over, and start
fresh?

~~~
ta75757
OP claims "they have not sued me or sent me any sort of court order"

Edit: According to [0] they don't need to. They just send you a notice and if
you don't respond in time they take what they want. It's not clear what
constitutes responding or how to get the case into a court and out of an
administrative process. I don't know about the out-of-state bank thing.

[0] [http://www.mass.gov/dor/businesses/help-and-
resources/legal-...](http://www.mass.gov/dor/businesses/help-and-
resources/legal-library/administrative-procedures/ap-631-the-collection-
process.html)

~~~
DannyBee
This seems highly unlikely. I only spent one year of law school in MA, but i
distinctly remember that any sort of prejudgment attachment required a court
order.

~~~
ta75757
I'd believe that, I didn't do a thorough search. But the document that claims
to describe Mass DOR collections doesn't cover it.

~~~
DannyBee
FWIW: I can find state tax liens with these names on it, but it may or may not
be in any way relate to this.

------
mmastrac
This post was from 2013. Has anyone heard from the author what might have
happened lately?

~~~
fargolime
There's an update on the blog post now.

------
spdustin
I've had something similar to this happen with another state agency (not the
state in which by business is incorporated). We had opened a tax account in
another state as we intended to convert a contractor to an FTE, but we ended
up terminating the worker's contract. Time passes, and Chase processes a levy
on behalf of a collections agency authorized to collect for the state
department of revenue. They had automatically been calculating tax owed for
one FTE, even though we had never filed a statement indicating we were
withholding. Then fees, interest, penalties, etc. added up and it made for a
very bad day or two here.

It took a few calls between us, Chase and the state agency, and a simple form
to get the levy order rescinded before Chase fulfilled it (30 days after their
receipt, for most such orders). Our funds were released within minutes of
calling them to confirm that the state sent them a fax rescinding the levy
order.

I've heard numerous horror stories about dealing with Chase on matters like
this. I didn't find those stories to be true, in our case. I suspect the
author either handled it (one would hope), or closed his tax account and
chalked it up to lessons learned (a regrettable, but understandable decision
to avoid further anguish and just "be done with it").

~~~
spdustin
Noticed the author's complaint at the end about recovering the funds. No
massive legal fees are necessary to recover them if the agency rescinds the
levy. Just a fairly simple request for refund. I think he, like many in this
situation, got indignant and had a flame-out emotional response. The lack of
follow up suggests that it wasn't ultimately as big of a deal as he thought,
IMHO.

------
Someone1234
I like how this is from 2013 and yet there is still no update on that blog,
the linked blog, or anywhere else as far as I can tell...

~~~
xenosapien
He obviously had all of his assets frozen and is unable to pay for Internet
access any more.

------
tlrobinson
Cached:
[http://webcache.googleusercontent.com/search?q=cache:u4KJzfI...](http://webcache.googleusercontent.com/search?q=cache:u4KJzfIeirwJ:jonstokes.com/2013/02/24/it-
could-happen-to-you/+&cd=1&hl=en&ct=clnk&gl=us)

------
matteotom
This gives me yet another good reason to keep BECU[1] as my only bank for any
non-trivial amount of money... it can be a pain if I need an ATM, but I can at
least trust that they will generally be on my side.

[1] [https://becu.org](https://becu.org)

~~~
koenigdavidmj
I know from living in Seattle that they're a reputable credit union, but the
fact that their home page gives me a certificate error is a bad pattern that
trains users to ignore scary red messages. (The problem is that the cert is
for www.becu.org , not becu.org .)

~~~
kayfox
I think its because they never intended to be linked to without the www.

~~~
devicenull
That's not really an excuse. This is a pretty trivial thing to fix (update the
cert, or force a redirect).

~~~
toast0
They do force a redirect on [http://becu.org/](http://becu.org/), but they
can't really force a redirect on [https://becu.org/](https://becu.org/),
because you would need to accept the mismatched name before you could get the
redirect.

Although, I'm surprised they don't have an alternate name, most of the CA's
I've worked with recently automatically add the naked domain as an alternate
name when you order a cert with www

------
ggchappell
FTA:

> Every financial institution in the world is going to roll over for a state
> government like that, and leave you to sort out of if the request was legit
> or not. There’s no place to hide. So Chase isn’t actually the bad guy here.

I don't see the logic here. Everyone does it, so it must not be bad? I don't
agree.

------
ibejoeb
Yeah, some of the state revenue agencies move _very_ quickly. NY claimed to
have sent a notice (prior to their rather good online system they have today)
and 14 days later they had taken the money.

Recently I've noticed a lot of very small bills originating from adjustments
on years-old returns. These are things that probably should be disputed, but
they are coming in at $100-$200, which is far less that I'd pay someone to
research for even an hour.

Here's my question: if the revenue department is going to make rounding-error
level adjustments, why don't they just send me an advance tax bill, with all
of the calculations that I can verify, and I'll just pay it?

------
dsl
Since the site is now down...

Original text is published here:
[http://digbysblog.blogspot.com/2013/02/chase-just-handed-
ove...](http://digbysblog.blogspot.com/2013/02/chase-just-handed-over-all-our-
assets.html)

------
nixisfun
The author mentions he keeps his money in a foreign bank that I presume the MA
department of revenue cannot get at. Does anyone have any recommendations of
overseas banks that are easy to open accounts with without travelling to said
country.

~~~
jonstokes
See my above comment. It was just luck that they didn't get to the Barclays
money, and yeah that's probably also because Barclays is foreign that the luck
happened. But I wouldn't count on that. If I hadn't moved quickly to hire a
good tax lawyer and then contact MA and start working on a resolution, they'd
have found and frozen our Barclays assets eventually.

------
aepearson
Strangely enough, almost this exact same thing happened to me.

Apparently I was accountable for my ex-wife's tax bill (for a year in which we
were not married) well after our divorce...in a state I never worked in.

~~~
nhayden
Did you wind up having to pay?

~~~
aepearson
Yep.

They just took it. I happened to have a little in savings, and had just gotten
my paycheck the day they took everything...so they got a decent amount
(relative to me at least).

Also, once they decide to take your money it's nearly impossible to get it
back.

------
qodeninja
what was the part about keeping all their money in a foreign bank? that seemed
random.

I wonder what else is going on?

------
jackmaney
Honestly, the older I get, the more tempted I am to attach a safe to a corner
of my house, close my bank accounts, and just store cash in the safe.

~~~
ta75757
That's what civil asset forfeiture is for. That's drug money you got there you
see.

(Never mind that if word gets out you will get robbed.)

~~~
doublextremevil
that's what bitcoin is for. A cold wallet, encrypted and backed up in multiple
places would solve that problem.

~~~
Someone1234
That's a great way of getting robbed even without anyone needing to take your
money, you would be effectively giving it away.

For example, the closing price exactly one year ago today was $880. Yesterday
it was $248. So if you had $20,000 in savings and put them into Bitcoin, you'd
have $5,636 now. What a wonderful savings account a 75% loss...

I swear the only reason people keep suggesting Bitcoin as an "investment" is
because it is a pyramid scheme and they themselves are already deeply in the
red, and see bringing in others as their only saviour.

~~~
jackmaney
Exactly. As far as I'm concerned, anyone suggesting Bitcoin as a viable
currency for investment is either not worth taking seriously or a con artist.

------
dba7dba
I heard somewhere that when you stop living in a certain state (say California
in mid 2014) you should still file state tax in California in 2016 to show
that you made no income in 2015 in California. This is supposedly a
recommended way to end your 'relationship' with the state.

Can anyone confirm this please?

~~~
aristus
I don't know about that but it helps to ask your CPA (also, get a CPA), and
have proof (eg, lease / mortgage, etc) of residency handy. CA once went after
me for income I had earned years before I'd ever lived there, and sorting that
out was a mess.

------
hippich
Could someone confirm that in this case using local small credit union would
give certain protections in similar cases? i.e. credit union with branches in
your home state only vs. having branches in most states like Bank of America
or Chase does?

------
imaginenore
It's shit like this that makes me want Bitcoin or one of the alternatives to
succeed. I don't care if it ends up being worth $10 or $50K, as long as many
people use it. The banking system is rotten to the core.

~~~
ta75757
The government will take what it wants. If you have a house, they will take
it. If you have a car, they will take it. Bits on a hard drive don't help if
you can't hold property. They even got the Swiss banks to cough up American
accounts.

~~~
SnicersX
If you operate in a system of currency you are agreeing to play by their
rules. You don't have to do business in America, you can go anywhere you want.
Is it harder? Possibly. Will you be a successful? Maybe not. Learn the system
if you are going into business, don't just complain because you "don't like
taxes".

------
forrestthewoods
This is from Feb 2013. Was there ever any resolution?

