Simons Chase landed on Vermont’s online list of the 100 biggest tax deadbeats, but he says he didn’t belong there.
According to Chase, his experience illustrates a muddled tax department process for dealing with people who owe the state money.
However, the department says people have plenty of opportunity to avoid having their name appear on the list.
After claiming he owed more than $778,000 in taxes and penalties, the Vermont tax department ultimately accepted $20 to settle his bill.
Chase says the settlement proves he was in the right all along – and that the department never clearly explained how the process works for resolving a tax dispute. It took Chase more than two years to conclude his case.
“It was an enormous amounts of time for something that was $20. A cursory review of my situation would have shown at least some doubt,” he says.
Chase lives in Florida, but in 2009 he had a residence in Stratton. He and his wife also owned a home in New York State.
Chase says 2009 was a chaotic year for him. He and his wife split up and the houses were sold. He says because of the upheaval caused by the dissolution of his family, he failed to file both state and federal returns in 2010. Nor did he take the simple step of filing for an extension.
He says at the time his earnings were modest - yet the homes he and his wife owned were sold for a substantial amount of money: a total of $5.6 million. But Chase says when he calculated taxable gains from the home sales, he concluded his liability was small.
“It was my own dereliction that I didn’t file. I knew it was a problem, but again I didn’t owe any money,” he says.
In 2012 both the state and federal governments came after him, assuming he owed a significant capital gains tax on the home sales.
“I was in touch with them. Despite my lateness, I always took it seriously,” says Chase.
Chase says he settled his liability with the federal government, but the state continued to tell him he owed a significant amount of taxes and penalties.
Chase says he provided the department with the documents it requested. He says the department never explained the process and he was never given an opportunity to appeal.
“It was never clear what I was involved with in the dialog with the department. It was at first a review of the circumstances but there were no guidelines, procedures, processes,” he says.
The tax department won’t discuss individual cases, so it’s difficult to verify all the specifics of Chase’s story.
But based on emails and correspondence provided to VPR, Chase sent additional documents to the department in January last year, asking if his case was resolved.
"How do you tell your kids that you don't owe anything, but you're on a tax deadbeat list and you're like a criminal?" - Simon Chase
Apparently receiving no response, he sent another email to an individual at the department two months later, asking where things stood. It appears he received no response.
Then last December, Chase received a notice that he was about to be placed on the state’s online tax deadbeat list. A month later, his name appeared on the list.
“How do you tell your kids that you don’t owe anything, but you’re on a tax deadbeat list and you’re like a criminal,” he says.
Chase says the tax department never notified him that he could appeal his tax bill, only that he had to pay up or go to court.
But the Department of Taxes says the process is made very clear to those who owe taxes – and many people take advantage of the opportunity to appeal.
“We do get a lot of appeals; people have questions and they have 60 days. A lot of people we contact with an assessment will appeal it,” says Commissioner Mary Peterson.
Peterson says improvements are being made to made to the process, but she says the tax department is in constant communication with the people who owe money - they end up on the deadbeat list only when all other approaches have failed.
"We're not a perfect department by any stretch of the imagination but we have really hard-working employees and they're trying to unwind something that is complex if somebody doesn't follow the very simple ground rule of filing to begin with." - Commissioner Mary Peterson
“Somebody can go shout from the rooftops and say how we do this wrong, etc. and I can’t respond… but I do meet with taxpayers regularly,” she says.
“We’re not a perfect department by any stretch of the imagination but we have really hard-working employees and they’re trying to unwind something that is complex, if somebody doesn’t follow the very simple ground rule of filing to begin with.”
Peterson says a situation where a large tax liability is settled for much less money is likely because the taxpayer didn’t provide her department with the right information in a timely way.
“It’s really a shame that the taxpayers money was wasted having to drag out this information, rather than somebody just coming forward and filing their return – none of this would have ever happened,” Peterson says.
Simons Chase agrees his case didn’t need to take so much time and resources, but he says that’s the fault of the tax department.
He says his experience should serve as a cautionary tale.
“Listen to my story, because you might get a letter one day,” says Chase.
Chase’s name was removed from the tax deadbeat list last summer, after he sent the department a check for $20.
