Robert J. Fedor, Esq., L.L.C.

Problems may arise when a move is made to avoid paying taxes

Residents who live in Ohio are required to pay applicable state taxes as well as taxes on income earned in the state. For those individuals who own one home and live year round in Ohio, there's little question about state taxes. For those individuals who move or have one or more residences in another state, however, tax matters can quickly get complicated. 

Matters related to state taxes can become especially complex when an indivdiual takes steps to intentionally avoid paying state taxes. For example, if a small business owner plans to sell the business and move to a state with no or a lower income tax, the state from which he or she is moving may take issue with the move and attempt to collect taxes. 

Many people may maintain two or more residences around the country for a variety of reasons and purposes. These individuals may get into tax trouble if attempting to use each residence and state to their own financial advantage. Take for example a businessman whose company was set to go public. In an attempt to avoid paying high state income taxes, the man attempted to leave his primary residence and set up a residence in a more tax-friendly state.

The Internal Revenue Service took issue with his move, however, citing his frequent trips back to his primary residence and the fact that is teenage son still lived in the home as evidence of his attempts to avoid paying taxes. Other factors often taken into consideration by the IRS when determining state residency include time spent in state, location of spouse and children, location of employer or business and where an individual is registered to vote.

Those men and women facing possible criminal charges related to tax evasion, would be wise to retain an attorney who handles criminal tax matters. A legal professional can provide advice, counsel and assistance in how best to proceed.

Source: Forbes, "Moving States To Beat The Tax Man?," Robert W. Wood, Nov. 1, 2013

No Comments

Leave a comment
Comment Information