Should local state government (In the US) be able to penalize you for not claiming a tax refund in a timely fashion?
I recently had a dispute with my local State Government over some tax rules that I wanted to run across the Fluther community, because I feel this law I was penalized for is very unconstitutional. Now this happened some time ago, but my abatement has gone so far unanswered, so I wanted to hopefully speed up the process. In the United States, Federal Law states that so long as you are going to receive a refund in Federal Taxes, you can file as late as you want, however I believe after 3 years, you can no longer file to get that money. There is no penalty for filing late; you just delay your refund return.
I believed this to be the case in Ohio as well, where I live. I was wrong. Apparently in Ohio, if you file your taxes late, you can be penalized, even if you are due a refund. In my case, I was penalized $500** for not filing on time. More details on that below. Isn’t (or Shouldn’t) it be unconstitutional for the government to penalize you for filing late, when they in fact owe you money? In all other 49 states, there is no penalty for filing late unless you owe money, and I feel like that’s the case because it would be illegal to charge someone money for not claiming money in a timely fashion.
**I was charged $500 because they were sending letters to my former address where my previous taxes were filed under, they were claiming that I “owed $1,607.58”, and wasn’t until they called me that I then gathered my tax information to prove I was actually due a refund. But at that point, I filed enough months later that the penalty had reached its maximum point.
Ohio State Tax Law
Federal Tax Law—First line states that you will not incrue a penalty if you are due a refund.
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That… sounds outrageous to me. I’ve never heard of such a system before now. A lot of people don’t file their taxes on time – a lot of people don’t file them at all, even when it’s to their benefit to do so.
I understand I filed late, and technically that is against Ohio Law, but my beef is with the $500 penalty, when I was owed $89.00 in a refund… I mean isn’t that to the point of excessive-ness that it would break the 8th Ammendment of the United States which essentially goes over excessive fines imposed?
War on the poor.
But on what basis would it be unconstitutional?
The 8th Amendment of the United States is about a fitting punishment for crime committed. The crime here is that I didn’t file my taxes in a timely fashion to receive my $89.00 refund. The punishment was $500. Punishment does not fit the crime in my eyes.
The Eighth Amendment requires that every punishment imposed by the government be commensurate with the offense committed by the defendant. More detail here
The state may have determined the penalty is “rational” in that it is necessary for it to be that high to minimize the rate of lateness, balanced against the administrative burden of enforcing the law.
Not defending them, and Ohio seems to generally be a fucked up place when it comes to enforcing rules like that, but that’d perhaps be their defense.
I just don’t see how this isn’t obscenely illegal. I don’t care if they have to balance their books, then they can simply make the law so that you are not entitled to a refund at all if you don’t file on time. But charging $500 for filing late is waay excessive.
If any business did this in the marketplace, they would be sued left and right. Say you buy a tablet at Best Buy for $500. There is a rebate for $100 if you mail it in within 3 months. Let’s say the company that makes that tablet sends you a letter in a year saying they are going to penalize you for not filling out and sending in that rebate, and you now owe them $500 because you didn’t claim the money that was owed to you. Does that sound fair? No, what they do is simply say “You are no longer entitled to that money”.
Right?
Mama said the police and IRS are always right, I disagree, but in cases where it’s fight or cave with those two, I cave every time, totally not worth it.
But you’re right, that penalty outweighs your ‘crime’, which is having moved if I read correctly. Ignorant.
Well me having moved is just part of the reason why the penalty was so excessive. My actual crime was that I didn’t file my taxes, which I have no great excuse for other than being busy, but hell, who isn’t busy these days. The letters they claimed to have sent me in the previous months went unread probably at my old residence. The penalty of $50 was assessed every month I didn’t file, maximum of $500. I didn’t realize the penalty in Ohio (the only state in the US with such a penalty) would actually assess a late fee even when expecting a return.
@bolwerk I actually read that some time ago. Crazy, right? That, however, I would imagine infringes on the 1st Amendment of the United States.
@RandomMrAdam Well then, if you didn’t file, it’s kind of on you right? Everyone in the US knows that you have a specific date to get it in, then you ask for an extension if you can’t, it’s pretty black and white, no offense.
We had a 1099 turned in from 2011 (they filed late or something) and on 12/6/13 I got a bill that was due by ½/14 so there went my Christmas money. Life’s not fair and the IRS is not cool, stay on their good side, pay the thing and never do it again. :)
@KNOWITALL I take full responsibility for filing late. I 100% agree there should maybe even be a penalty (Even though 49 of the 50 states, and all Federal taxes do not have ANY penalty for filing late if you are entitled a refund).
But I think that $500 is extremely excessive, particularly when the only thing you did, if you break it down, was not file paperwork that would entitle you to a refund because you paid more than your fair share of taxes for the year.
I posted this in the original post; straight from the IRS website—There is no penalty for filing a late return if you are due a refund. I guess I was simply ignorant of the Ohio Law, which is different from anywhere else in the US.
@RandomMrAdam Yes, you’re basically paying $500 for a life lesson about the IRS, honey, take it that way if you can.
Basically don’t trust any government agency NOT to screw you over.
@KNOWITALL The general question I was asking was the constitutional merit behind penalizing someone who didn’t claim money from the state. It sounds like you are in favor of that because that is just how things are.
I committed no crime, I simply delayed the process in which the State was owing me of money. Because I delayed my refund, I am penalized $500. Fair? If any other organization, or friend, or family, or whomever was doing that, it would not be deemed legal in court. Yet people see these things that the government does and say “Well, I guess it’s the law”
This isn’t a Life Lesson in my mind. The State of Ohio just robbed me of $500 because I didn’t claim the $89.00 they owed me in a timely fashion. And if the lesson is “File your taxes on time” then that’s only a lesson if you live in Ohio. And it’s only a lesson because of a very sketchy law in the tax code which seems very unconstitutional, which again is why I posed this question.
Now if you want to go into more detail as to WHY $500 is a fair penalty then I would be happy to hear the specifics of what makes that penalty fair. It sounds like a figure that someone just threw out there for people avoiding filing taxes. So my punishment is bunched in with the punishment for those who are filing to avoid paying the State money.
@RandomMrAdam In my opinion, you disregarded a 58 yr deadline without checking on penalties and repercussions, so you didn’t protect yourself. All I’m saying is that with official agencies, you can’t do that.
They didn’t rob you if that is the rule in place, you could easily have looked it up if you’d researched it before missing the deadline. I believe everyone has two months past the April 15th deadline before penalties are incurred. Life isn’t fair.
@KNOWITALL The OP is aware that he broke the law, and that he is being penalized for a reason. His question is about whether the law is fair and constitutional.
@KNOWITALL – Again, you are simply saying “Well that’s the law” My question is “Is that law fair”? Until you posted, I would have believed that anyone would feel that being penalized $500 for not claiming $89.00 by filing taxes would say that the penalty is too severe but you are not only saying that it’s not too severe but rather If that’s the law, then you paid the price. But why is there a $500 penalty for not filing? That’s the core of the question. Were my actions affecting them financially in the impact of $500? Maybe…probably not, especially since they actually owed me money.
People who make these laws should factor in what punishment is suitable per the crime. Are you then saying that penalizing a citizen for not filing for a tax refund should be penalized upward of $500? 49 out of 50 states along with the Federal Tax code says that is not necessary, however you and Ohio seem to think that’s a fair punishment? Am I missing something?
@KNOWITALL —If stealing a pack of gum was punishable by life in prison, you would probably be a bit shocked at that outcome, correct? I know that’s a bit of a stretch and nothing close to what is going on with me, but all I am asking is for you to take a look at this law and deem whether or not excessive punishment was enforced.
You have moral imperative to ignore unjust laws. You probably can’t fight the state on this and win, but maybe you can steal something worth $500 from the state to recoup your loses. Scrap metal perhaps?
@bolwerk – Classy, I like it. I think I did see a park bench downtown that would look nice in my backyard… :P
Nah – Obviously I paid this loong time ago, but haven’t heard back when I put an abatement in. Sure, I’m bitter that I paid $500, but I won’t lose any sleep over it now, nor would I be prompted to steal state property.
@RandomMrAdam If you live in Ohio and you didn’t file a return by April 15th, they have every right to penalize you as the law is written there (for everyone to see in black and white.)
@KNOWITALL – You clearly do not get my question. The law is currently what it is. I know that. I paid my penalty. Do you think it’s fair for the State charge $500 because that person did not file to get $89.00 refund from the State? Just answer that.
@KNOWITALL What it comes down to is this: is it possible for there to be a law that is unjust? If you think that all laws are by definition just, you have already answered this question several times over, in acknowledging that the law exists.
Assuming that a law can be unjust, is this particular law unjust? That is the question.
@RandomMrAdam No, I don’t think it’s fair.
@glacial There are all kinds of unjust laws that we all adhere to. Because a law is unfair doesn’t mean you just ignore it and get upset when you’re penalized for ignoring it though. It’s hard for me to dismiss the OP’s neglect in this instance.
@KNOWITALL “Because a law is unfair doesn’t mean you just ignore it and get upset when you’re penalized for ignoring it though.”
I completely agree with you (to a point – I mean the civil rights movement was a just movement and was about doing exactly this). That just isn’t what the OP’s question is about.
@bolwerk I got distracted by the whining…lol
@KNOWITALL: u has t2 obey!1!! is a form of whining.
@KNOWITALL – I feel like you are building more on this story than what’s there. I never neglected to pay them. I never said I was refusing to pay. I did pay them as soon as they reached me using my correct address; I am asking now if the punishment sounded fair. Early on in this post, I took full responsibility and was simply asking people on Fluther to evaluate the fairness of the law, yet you went on 3 times to lecture me that I should obey the law.
Please in the future, avoid lecturing people who take full responsibility, and rather focus on the question that they are asking. No one asks questions on here to get lectures from people they don’t know.
@KNOWITALL—Thanks for the less than sincere apology. You seem like a pleasant person.
Penalty amount is written into tax law. You can claim ignorance of the law., but that is not defensible.
Constitutionally you broke the law and penalty was applied. You cannot claim it is not constitutional, it is a law.
You just disagree with the amount.
@Tropical_Willie “You cannot claim it is not constitutional, it is a law.”
Really? People challenge the constitutionality of laws all the time. Sometimes they’re wrong, but sometimes they’re right, and the laws are struck down.
@glacial
Tax code got Al Capone sent to prison. Stopping paying your income tax and claim it in constitutional.
@Tropical_Willie That’s… not how I’d suggest challenging a law.
I don’t understand why people are so adversarial on this question. The OP admitted his own lack of knowledge about the state tax laws and paid his fine as soon as he found out about it. Not once did he say he was going to stop paying taxes. Jeez.
He has asked for abatement because he believes the penalty is not constitutional. The OP does not want to pay the penalty.
~ ~ ~ JEEEEZZZ ~ ~
@glacial Yep, still baffled. So, questioning the law is always bad?
@Tropical_Willie – You are confusing two things. I paid my taxes, but simply didn’t file to get my refund…how is that “Stopping paying your income tax”? If I owed taxes and got a penalty, that seems fair, but what some people aren’t understanding is that there was money owed to me by the State. And when I didn’t file to get that refund, they charged me $500 in penalties for not collecting money that was owed to me.
Call a tax attorney, but think you find the penalty ( if was taken from refund or charged to you outright ) is not “arbitrary or capricious”.
I’m not a lawyer or CPA.
Just an update on this: I finally received a letter back in the mail from the Ohio Department of Taxation and they are refunding me $466.00, yet keeping the remaining $44 for penalties (which seems more fitting than $500 penalty).
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