Category: tax

Category: prose

It is often said that some country is ruled by man and the America is ruled by law, however from what I have observed, America is ruled by computer. Recently I had another first hand experience.

I have a tax return family client consisting of John, Mary, and their daughter Eva. John lived in VA for a short period and then relocated in New York. Mary stayed in VA their daughter in VA.

This is relatively simple case: I filed them jointly for federal return as well as well for VA return claiming the daughter. The problem came up afterwards, VA sent client a letter requesting to pay back $50 to the state. The amount is small, but since it is considered as an “error” in the return, it represents a much bigger reputation and trust issue, and I could take it lightly.

I immediately called the VA department of taxation and discovered the problem was that they disallowed full exemption for the dependent Eva. I explained the situation and pointed out the schedule that I used to claim the exemption. They examined the schedule and agreed with me, and told me that they will issue another letter to cancel the request for payment. I expressed my gratitude for having such an competent and efficient local government, notified the client that the problem has been resolved, and forgot about the matter.

A few weeks later, I got another message from client that VA keeps asking for the payment, so I started a second round of calls to VA. This time the bureaucracy raised its ugly head. What was promised to me was denied by the manager, and I could not speak with the manager for the reason. After many phone calls, each time speaking with a different representative and explaining the issue from scratch, I realized that it is not that they did not understand the issue, nor that they did not want correct the issue, but they were limited by their computer system. In their system, the resident period of the dependent was set to the same as the “primary” tax payer. They suggested to amend the return to file Mary as “primary”. I refused stating that “I file amended return only when there was a problem, and in this case, there wasn’t”. They said “If you do not do this for us, we cannot do anything for you”.

While I was in standoff with VA, the situation became worse, the client had received a letter from the collection company. At this time I came to conclusion that my quixotic pursuit to the truth may not be in the best interest for the client, so I gave up and replied the collection company, and sent an amended return to VA. In the end, I still refuse to admit guilt, in the cover letter to VA, I said:

The issue, as I understand it, is not a factual issue nor a compliance issue with Virginia tax law, but rather a technical issue with the system that the department uses to process the return. The state approved software that I used to prepare the return had no such problem at all. Therefore the right solution would be for the department to contact the software provider to fix the defect for the common good of the state and its people.

However, to break the technical stalemate, I have amended the return per suggestion from the customer service of the department. As I do not believe there is a problem with the original filing, you can either accept the original return if you have applied a fix or found a workaround, or accept this amended return, whichever you find it easier.

The letter, like “peeing into the snow on a dark winter’s night”, makes no difference. Finally VA accepted and processed my amended return, and the computer won!