- Posted by Ohio Tax Attorney
- On February 21, 2022
- ohio back tax, ohio sales tax, Ohio Tax Attorney, sales tax, tax attorney
I owe Ohio Sales Tax?!
But I never even sold anything.
And this is from like 10 years ago.
What in the world?!
That sounds familiar if you are getting notices from Ohio Special Counsel (aka private debt collectors for the Ohio Attorney General).
Ohio does things pretty differently when it comes to collecting back tax – especially delinquent sales tax. First of all, if you file for a vendor’s license, you have automatically created a filing requirement. You MUST file each period (typically either twice a year or monthly, depending on your filing frequency). If you don’t file, the state of Ohio Department of Taxation will file for you and create an estimated assessment.
These “estimates” can be rather hefty – and generally very inaccurate.
Let’s say you moved and did not leave a forwarding address.
These assessments are still going to go on the books of the state, and you are on the hook for the liability once the assessment is final (typically, 60 days after the assessment notice).
The Department of Taxation will then “certify” the assessment over to the Ohio Attorney General. Of course, penalties and interest will be added to this amount. So, an estimated assessment of $1,000 is likely closer to $2,500 by the time it makes its way to the Ohio Attorney General. Once the Ohio Attorney General gets the “certified assessment” they will then start adding their own interest, penalties, and collection costs to the balance. That $2,500 will likely be close to $3,500 and will continue adding about $100-$200 per month to it. They will also file a tax lien against you in your last known county (or in Franklin County if you were not an Ohio resident).
The Ohio Attorney General will then outsource the collection of that debt to a third-party debt collector (an attorney’s office in the state) for collection. If they still don’t have your correct address, you may not even be aware of it at this point – but the interest and costs are still accruing. When the amount becomes large enough, that private debt collector (the Special Counsel) may try to find your new address . . . once they do, the notices will start pouring in.
Likely, at least 5-6 years have past and the original $1,000 estimated assessment is now closer to $6,000.
Oh, and by the way, that assessment was just for one period (let’s assume monthly). So, this process has repeated over and over again for five years – so you are actually being notified that you owe the state of Ohio over $250,000 in a liability related to sales tax for a vendor’s license that you had zero sales under.
And they want their money.
You’ve tried explaining to the debt collector over and over that you never had any sales. They’ve set you up on a payment plan of $500 and have threatened to garnish your wages and conduct a debtor’s exam in court if you don’t have the funds within a year.
Oh, and they don’t care at all that you had no sales.
After all, the amounts were “certified” by the Ohio Department of Taxation.
You try calling the Attorney General directly. They refer you back to the special counsel.
You try calling the Department of Taxation. Three different agents tell you different things.
One tells you that you are past the appeal rights to challenge the assessment.
One tells you that it is with the Attorney General and you will need to contact them.
One tells you to log into the Ohio Business Gateway (what in the world is that?).
If you are in this position, you need to call us today. We have a tried-and-true procedure in place with designated contacts within the state to resolve these precise situations within 2-weeks. If you truly had zero sales, we could get this zeroed out with the department of Taxation and the Attorney General immediately on your behalf. Call us today at 330-331-7611 or schedule a free case analysis to go over your specific case.