Q: What can my friend do as they may have been given bad NC tax advice?
My friend may have been given bad NC state tax advice from an out of state nonprofit. They live outside the US & has used this nonprofit for several years to fill out their taxes. The 1st year they lived outside the US they asked the nonprofit why they did not give them any NC tax forms to file & they said since they do not live in the USA, they do not have to file NC state taxes but they have to keep on filling US federal taxes. So my friend thought that this nonprofit knew what they are talking about.
Now my friend has received a letter from NC for unpaid taxes for 1st year they lived outside the US. They contacted the organization, which sent a letter explaining that my friend did not live in NC or the USA that year & therefore they do not owe NC any taxes, plus they sent in form 2555 of their federal taxes which also states that they did not live in the USA that year. NC has sent 2nd letter saying if they do not pay NC will garnish their wages. What should be done?
A: While taxpayers are still liable for unpaid taxes, penalties, and interest from bad tax preparer advice, you can sue the tax preparer for providing bad advice (a malpractice claim). I would consider contacting an attorney. As for NC claim, you will need an attorney to review whether the NC claim has merit. You potentially can negotiate a structured payment schedule with reasonable monthly payments and may be able to abate (remove) some of the penalties.
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