NewEgg Tax in More States

[StopTheCatbox]

 

9 minutes ago, dalekphalm said:

Sure. But if they have to audit you, they've already spent more than $160, and therefore, it's in their best interest NOT to audit you.

 

Good accountants and tax investigators are NOT cheap.

 

And even if they did audit you, and you provided the list, and it comes up cheaper than what they are claiming? It wastes your time, but it saves you money and wastes their money.

I know that, but most people fear the tax agencies and by and large will just pay the requested amount.

 

I just talked with a Newegg customer service rep named Aaron. He told me they have gotten a lot of calls from CT people today and that at this time, we do not have to reply to the DRS in this matter as Newegg is working with them. Now obviously, Aaron is not a tax attorney, but this lends credence to the idea that the state can't do anything about this legally, yet. Aaron also said he would forward my request to get an itemized list of transactions that Newegg sent to the DRS used to arrive at the debt amount.

[WabiSabi89]

1 hour ago, RedZT said:

 

Looks like Newegg put zero legal effort into protecting our privacy.

 

You may be right in regard to customer privacy, though they have been fighting in court against brutish state sales tax collection initiatives.  Probably more self-serving than altruistic, but they were one of three online retailers (along with Wayfair and Overstock) that challenged South Dakota's bill which imposed an obligation on them to collect sales tax on behalf of SD purchases, despite the entities not having a physical presence in the state.  They won the case in the SD Supreme Court, but the SCOTUS granted cert and will be hearing the case in the spring.  If Quill (the case that set the physical presence standard) is overturned, we're likely to see all online retailers of notable size collecting sales tax on all sales regardless of physical presence, so the privacy issue may become moot in the near future.  http://www.nationaljeweler.com/majors/public-policy/6215-supreme-court-agrees-to-hear-online-sales-tax-case

Personally, I don't think I'll be purchasing from Newegg in the future, at least until there's some assurances that this practice has come to an end, and certainly they could have been more forthright with customers and given some advance notice so people could choose to amend their returns and come into compliance voluntarily, which would have allowed them to take advantage of CT's Fresh Start initiative and save a bit on interest. 

[Mightythor460]

It looks like my total is lower than it would have been so I'm just going to pay what they want. But Newegg has lost a customer until they at minimum begin charging sales tax.

[dalekphalm]

4 minutes ago, StopTheCatbox said:

 

I know that, but most people fear the tax agencies and by and large will just pay the requested amount.

 

I just talked with a Newegg customer service rep named Aaron. He told me they have gotten a lot of calls from CT people today and that at this time, we do not have to reply to the DRS in this matter as Newegg is working with them. Now obviously, Aaron is not a tax attorney, but this lends credence to the idea that the state can't do anything about this legally, yet. Aaron also said he would forward my request to get an itemized list of transactions that Newegg sent to the DRS used to arrive at the debt amount.

That's pretty much how most Studios force people to pay for copyright infringement (torrenting) - they send a threatening looking letter, and most people, not knowing better, just pay up because of fear.

[StopTheCatbox]

Just now, Mightythor460 said:

It looks like my total is lower than it would have been so I'm just going to pay what they want. But Newegg has lost a customer until they at minimum begin charging sales tax.

I'd hold off on that for the time being. See my previous post. I'm hoping you didn't already admit responsibility for the debt.

[Mightythor460]

Oh, I’m waiting for the last possible day.

[AcousticGinger]

I just tried calling the DRS, they absolutely will NOT speak to me in regards to this matter unless I provide them with the notice number. I was only going to ask if I HAD to pay by check and put my SSN on the letter, which I am uncomfortable with. After reading the above post, I think I might wait it out.

 

if I owe tax, fair is fair, I’ll pay it. But this whole “interest” thing is unreasonable.

[Steemax]

3 minutes ago, AcousticGinger said:

I just tried calling the DRS, they absolutely will NOT speak to me in regards to this matter unless I provide them with the notice number. I was only going to ask if I HAD to pay by check and put my SSN on the letter, which I am uncomfortable with. After reading the above post, I think I might wait it out.

 

if I owe tax, fair is fair, I’ll pay it. But this whole “interest” thing is unreasonable.

Doesn't sound like they want your money ..... oh well.

[StopTheCatbox]

4 minutes ago, AcousticGinger said:

if I owe tax, fair is fair, I’ll pay it. But this whole “interest” thing is unreasonable.

I have a major problem with how the state went about this, and the lack of itemized verification. 

[WabiSabi89]

2 hours ago, dalekphalm said:

Sure. But if they have to audit you, they've already spent more than $160, and therefore, it's in their best interest NOT to audit you.

 

Good accountants and tax investigators are NOT cheap.

 

And even if they did audit you, and you provided the list, and it comes up cheaper than what they are claiming? It wastes your time, but it saves you money and wastes their money.

This is a good point.  This initiative, and really just about any DRS initiative (save for criminal prosecutions they feel will have a chilling effect on other tax scofflaws) is solely intended to increase the amount of coin in the state coffers.  They don't want to have to initiate a full blown audit, because it ties up their agents that could be out working cases with higher collection potential.  However, my guess is they're not going to formally audit anyone in this case.  If you don't respond to the notice, they'll likely just make an assessment -- similar to how the IRS will send you an automated under reporter notice that adjusts your return if you failed to report an item of income that was reported to them on a 1099, W-2, K-1, etc.  You would essentially need to disagree with the DRS at which point they'd ask you to provide substantiation to refute the information newegg sent them (or prove that you already reported and paid the tax as some have indicated).  Not a tremendously burdensome process for the DRS.  

 

However, in my experience, dealing with the DRS is akin to the wild west.  They don't really have much in the way of published guidelines / procedures like the IRS does with the Internal Revenue Manual.  If you call in and are courteous and happen to get someone on the phone who isn't having a horrible day (plenty of their agents probably are today), they may cut you a deal that's more favorable than the deal offered in the notice, and likely without having to sign something attesting under penalties of perjury that the DRS's proposed deficiency assessment isn't understating your newegg purchases for the years in question.  If you think newegg understated your purchases to the DRS, signing that acknowledgment included with the notice is probably not the best idea.

Also, I've heard that some people have received assessments for 2013, the return for which would have been due April 2014 assuming you "reported" your use tax on a CT-1040. I would direct you to Conn. Agencies Regs. § 12-733(a)-1.  Whether or not this would bar the state from collecting on a proposed assessment is probably outside the scope of this post, but interpret it as you will.  

You also may wish to familiarize yourself with your rights as a CT taxpayer before reaching out to the DRS, should you choose to do so: http://www.ct.gov/drs/lib/drs/publications/pubsps/2017/ip2017-01.pdf  The "Inside Salt" article posted above states that CT's demand to retailers was to provide DRS with "a semi-colon delimited text file containing 16 fields of data–including customer names, customer addresses, ship to addresses, item descriptions and quantities sold." If newegg complied fully with CT's request, they should have a more accurate breakdown than simply the total money spent, and I think one could argue it's your right as a taxpayer to that information if the DRS is using it as a basis of assessment.

General disclaimer:  Please do not read the above as legal advice.  Everyone's situation is different and complexity of tax matters often exceeds what is practical to discuss online.  If you're wondering about what your options / rights are, I'd suggest speaking with a tax professional directly.

[Mightythor460]

So Newegg has washed their hands of this and are directing you to talk to the state.

 

Quote

I'm sorry you feel this way. Per state laws in Connecticut, Newegg was required to supply information on the orders that were placed. For further information regarding this situation you would have to contact the state at the phone number provided in your letter. -Rudy

 

[Donut417]

4 hours ago, imreloadin said:

make you provide the itemized list lol?

Michigan actually will make you provide a list if you spend more that $1000 online tax free. Well make is a strong word. They highly suggest. I mean Im sure people just say fuck sales tax. 

[Zalewski]

Just now, Donut417 said:

Michigan actually will make you provide a list if you spend more that $1000 online tax free. Well make is a strong word. They highly suggest. I mean Im sure people just say fuck sales tax. 

This is the complete opposite though. This is the state of Connecticut COMPLETELY guessing on a number based on what information Newegg gave to them. The figures shown on my paper are nowhere near accurate. This is them hoping that you admit to tax evasion and pay them a random number they came up with, only to be able to do this again next year.

[Donut417]

Just now, Zalewski said:

This is the complete opposite though. This is the state of Connecticut COMPLETELY guessing on a number based on what information Newegg gave to them. The figures shown on my paper are nowhere near accurate. This is them hoping that you admit to tax evasion and pay them a random number they came up with, only to be able to do this again next year.

This is why I shop on Amazon, as this way I dont have to be dishonest on my taxes. They are going after people because they are sick and tired of people not paying their sales tax. If this paper is not a scam, you might want to contact an attorney to see what you can do. 

 

I personally know people who have lied on their income taxes and not paid sales tax. I wouldn't be surprised if the state started going after them. The moral of the story, Debt, taxes and death are the only sure things in life. 

[Canada EH]

37 minutes ago, Donut417 said:

contact an attorney

LMFAO

Thats throwing money away right there!

[Mightythor460]

I’m going to bring it up to my accountant since I feel like this maybe should have come up every years he’s done my taxes...

[NovaNightmare]

I advise anyone upset about this to not make a mistake in ignoring or not dealing with it, not from CT, but I have seen several people gone after over back taxes and back sales tax that were not paid. Our company tracks newegg purchases every quarter and pays taxes as well. Also, even if the amount is small, don't believe they won't go after you. They are not going to be expending money to do so, those are sunk costs, which means they are already paying those attorneys, auditors and accountants whether they sit there doing nothing, or they audit you. In addition, as crap as an interest charge on back taxes are, they are pretty typical. They are essentially forgiving the charge if you pay what they presume you owe. 

[SteveGrabowski0]

Well, there goes any reason to ever order from newegg again considering how much better amazon is with customer support and shipping.

[dalekphalm]

Hopefully NewEgg will start collecting CT sales tax during the time of purchase, so to avoid confusion in the future. 

[rwblair89]

Hi there, my name is Russell Blair and I'm a reporter with The Hartford Courant writing a story about this. Apparently CT is the first state in the country to take this approach -- tracking down customers based on info provided from retailers. Looking to talk with anyone who got a letter if they are interested. You can reach me at rblair@courant.com. Thanks.

[BlueAxis]

The problem with this letter is that it is addressed to "John Doe" (purchaser) and the shipping address,  I just got a letter addressed to my name along with the company address for items that were purchased to be resold in construction jobs.  They offer no breakdown to match purchases and the ridiculous tax acceptance form binds you legally by signing to a crime if you are in error.... and YOU have to give them your SSN?  what??? I'm going to stay put....I think they are fishing....you'll have to pry that "ghost" tax from my cold dead hands Mr Malloy....

[StopTheCatbox]

I called the DRS today. I told the woman I spoke to about the 16 column file that should have been used to provide this data and that I wanted the list so I could validate the debt. As soon as I mentioned that she said she would have to have a supervisor call me back. I will post back with how that goes.

 

I heard back from the DRS supervisor. She said the same thing that was mentioned by another poster, that Newegg sent them only one amount. I asked her for clarification on what time period they observed and she told me it was 1/1 of whatever starting year is on your letter to 12/31 of the last year mentioned on the letter. The amount on the DRS letter doesn't match up with my invoices from that time period on Newegg.

[dalekphalm]

2 hours ago, StopTheCatbox said:

I called the DRS today. I told the woman I spoke to about the 16 column file that should have been used to provide this data and that I wanted the list so I could validate the debt. As soon as I mentioned that she said she would have to have a supervisor call me back. I will post back with how that goes.

 

I heard back from the DRS supervisor. She said the same thing that was mentioned by another poster, that Newegg sent them only one amount. I asked her for clarification on what time period they observed and she told me it was 1/1 of whatever starting year is on your letter to 12/31 of the last year mentioned on the letter. The amount on the DRS letter doesn't match up with my invoices from that time period on Newegg.

Seems like CT has an incompetent and underhanded revenue agency. 

 

I would demand an itemized list. If they don’t have one, they should get it. 

[Mightythor460]

I contacted my state representative and they had no idea about this and are going to dig into it.

[Zalewski]

https://www.google.com/amp/www.courant.com/politics/hc-pol-online-sales-tax-20180214-story,amp.html#ampshare=http://www.courant.com/politics/hc-pol-online-sales-tax-20180214-story.html

 

 

Hartford courant article posted today