State frivolous return
- According to the state in which I live, if one amends a U.S. income tax return or the federal government amends one for you(!), you are required to file an amended state return within six months. I did exactly as the state required however, the federal government has taken no action on my amended return.
Yesterday, I was assessed a $500 penalty for filing a frivolous return because when the State dept of revenue checked with the IRS, I still had the original amount of taxable income listed; and my state return had a different amount. Since the amount of federal taxable income is the start of the state taxable income, the state claims I made a frivolous return and is now assessing a $500 fine.
To complicate matters further, the only venue offered by the state for tax matters is none other than state tax court. After reviewing cases for nearly 3 hours last night, this court states the following:
1. There is a law that says that the starting point for computing state income tax is the federal taxable income.
2. However, there is another law the tax court relies on much more frequently that says that in the absence of reliable information, they can gather information from any source whatever.
In the cases I read, if they don't like the determination by the federal government's taxable income or they don't like the "no taxable income" claimed by the submitter, they petition the state employment services commission or the "employers" themselves and use the submitted information instead, regardless of what the submitter says.
The net result is that they determine what constitutes taxable income, and always in their favor.
It's this very kind of injustice that angers me so and makes me want to help other people in the same predicament.
Is there something I can do or should I simply pay the $500 and get it over with?