Q: My employer failed to withhold local income taxes from Oct. 2015 thru Sep 2019. I am not required to file a tax return
In the city in which I work or in the township where I live. (I didn’t realize the taxes weren’t withheld until notified by my employer. My employer, which is the Federal Government, stated the municipality may not attempt to collect the taxes, so I took no action at the time). In early 2023, I submitted a request for a refund of local income taxes withheld during 2020-2022 on days I worked from home using the municipality’s request form. (Basic form/not a tax return.) The municipality is now trying to collect the taxes my employer failed to withhold in 2015-2019. According to 2022 Ohio Revised Code Title 7 | Municipal Corporations Chapter 718 | Municipal Income Taxes Section 718.12, it appears the statute of limitations has passed for them to collect the taxes from ‘15-‘19. Am I required to pay the taxes for those years? If yes, what about interest and penalties?
A:
Based on your description and referencing Ohio Revised Code Title 7, Chapter 718, Section 718.12, it seems that the statute of limitations might indeed protect you from being liable for the local income taxes from 2015 to 2019. Typically, municipalities have a limited time frame within which they can collect unpaid taxes.
However, the situation can be complex, especially considering your employment with the Federal Government and the fact that the employer (in this case, the Federal Government) failed to withhold the taxes. These factors could potentially influence the application of the statute of limitations.
To address this situation, it would be wise to gather all relevant documentation, including any communication from your employer and the municipality. Careful review of these documents can provide clarity on your obligations and any potential defenses you might have.
Given the legal complexities and potential consequences, it’s advisable to consult with a tax attorney or a tax professional who is familiar with local tax laws in Ohio. They can offer a detailed analysis of your situation and provide specific guidance on how to proceed, including any potential liability for interest and penalties.
Remember, each tax situation is unique, and it's important to approach this matter with careful consideration of all the relevant legal and factual details. An expert's guidance can be invaluable in navigating these challenges.
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