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Guest Post: Welcome To The Predatory State of California--Even If You Don't Live There

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Welcome To The Predatory State of California--Even If You Don't Live There

Theft has been "legalized" for governments and banks in America.

Every once in a while an event crystallizes the stark reality behind the lacy curtain of propaganda and artifice. Here is one such event.

Correspondent R.T. is a retired accountant who has resided in Arizona since 2001. Prior to 2001, he resided in California.

On March 14, he received a letter from the California Franchise Tax Board (the agency that collects income taxes) claiming that he owed $1,343 for the tax year 2006. This was the first notification he'd ever received of this claim. This was an interesting claim given that R.T.:

-- Did not reside in California in 2006

-- Did not file a State income tax return in California in 2006

-- Did not have any outstanding tax issues with California in 2006

-- Did no business in California in 2006

-- Owned no property in California in 2006

The number $1,343 is also interesting, as R.T.'s total Federal tax liability in 2006 was $650. Since the top income tax rate in California is about 9%, and that only kicks in at relatively high income levels above $100,000 annually, then it's difficult to see how anyone could owe double their Federal tax in California state tax.

But the truly interesting part of the story is that the state took $1,343 out of R.T.'s Wells Fargo bank account on March 2, prior to notifying him of the claim. Wells Fargo charged R.T. $100 for handling the removal of his $1,343.

As R.T. observed: "If I had filed a 2006 California tax return the statute of limitations would have run out, but since I did not file a 2006 tax return there is no statute of limitations. This is the classic catch 22."

I do not have copies of the correspondence so I cannot verify this sequence of events, but I have corresponded with R.T. for many years and have found him to be a credible witness to national events. While some might claim he invented this story of state theft out of whole cloth, there is no basis in our years of correspondence to support that claim.

What is entirely believable is that the state of California, desperate for revenue, is churning out dubious income tax claims stretching back years and collecting the money without due process. This is theft, pure and simple, and charging the account owner $100 for transacting the theft is also theft.

Welcome to the predatory State of California--even if you don't live there. If any mainstream media journalist wants to pursue this story, email me and I will put you in touch with R.T.

Somehow I doubt this is a unique story. R.T. said he immediately tried to call the California Franchise Tax Board and was on hold for some time before his call was dropped. As of yesterday his attempts to contact the agency via phone were unsuccessful. Why are we not surprised by any of this? Perhaps it's because government/bank thievery and Catch-22 incompetence is now the backdrop of our culture.


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Tue, 03/20/2012 - 11:00 | 2273186 john39
john39's picture

the amazing thing is that it hasn't collapsed totally....  yet.

Tue, 03/20/2012 - 10:53 | 2273156 ItsDanger
ItsDanger's picture

I'd be interested to see how the $1,343 was determined.  Perhaps someone used his SSN.

Tue, 03/20/2012 - 11:07 | 2273214 bob_dabolina
bob_dabolina's picture

It was probably Obama's illegal fucking homeless uncle that got arrested for D.U.I.

Tue, 03/20/2012 - 10:54 | 2273158 swissaustrian
swissaustrian's picture

US tax authorities have the right to tap into a bank account in order to collect taxes, wtf? And they're doing it without notifying you first? Guilty until prooven innocent?

Tue, 03/20/2012 - 10:54 | 2273159 EBR MOD 0
EBR MOD 0's picture

Real world, if this happens, may cost him more in time and legal fees to recover than it is worth. Glad I have never and will never live in commiefornia. Sorry about all those trapped there.

Tue, 03/20/2012 - 10:55 | 2273162 JohnKozac
JohnKozac's picture

The Fuki Radiation flwoing in from Japan will fix everything for ya...wait a few months....

Tue, 03/20/2012 - 10:55 | 2273163 e-recep
e-recep's picture

How can a state meddle with anyone's bank account without the owner's consent?? How can a bank let the state withdraw money from anyone's bank account??


Banks and the government are hand in hand screwing individuals. The American Dream has become the American Nightmare. USA is no longer safe ground for capital.

Tue, 03/20/2012 - 11:09 | 2273226 Catullus
Catullus's picture

They get theirs. Banks willing give them access. Phone companies willing give them access. ISPs willing give them access. Apartment complexes and condos give them access. You're relying on the decisions made by someone's general council to protect you from the parasites.

Tue, 03/20/2012 - 13:10 | 2273806 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

I don't know the details of this particular case but go get one of your deposit slips.  Look very carefully at the left side and the bottom.  See that tiny..tiny fine print on there?  Get a magnifying glass and read it.

After you do that and start noticing other things (that you didn't notice before), be prepared for stuff kinda like this to start happening.


Tue, 03/20/2012 - 10:56 | 2273164 ZackAttack
ZackAttack's picture

It's not like that stadium project is going to pay for *itself*, you know.

Tue, 03/20/2012 - 10:56 | 2273165 HarryM
HarryM's picture

I'm going through the same thing with NY.

Left there in 1997 , they took money from my wife's account in 2011 for tax year 2005

Tue, 03/20/2012 - 11:01 | 2273188 HarryM
HarryM's picture

In the late 90's N.Y. State was sending out notices loosely stating "Othe people who gross as much as you do have paid an avergare of $1800 more in state taxes, please remit $1800 or explain why you feel it isn't due".

Meantime , my they have my tax return- --look at the F'n tax return s-bags!

That and the parasitic meter maids is one of the reasons I left  Scumbag City.


Tue, 03/20/2012 - 11:44 | 2273416 WakeUpPeeeeeople
WakeUpPeeeeeople's picture

And people wonder why someone would resort to flying an airplane thru the front door of the Revenuer's office

Tue, 03/20/2012 - 10:56 | 2273168 i love cholas
i love cholas's picture

Sounds like an intersting story but I need to see some documentation for me to get worked up about this.

Tue, 03/20/2012 - 10:57 | 2273169 TahoeBilly2012
TahoeBilly2012's picture

I had $300 sucked our of my account in Sacramento last month. I closed the account. Wait until Obama's new laws kick in soon, all the Ron Pauler's are going to summer camp and the rest you are going to have all your propery and food taken to feed the Pauler's and fight WW3.

Tue, 03/20/2012 - 11:16 | 2273205 Mercury
Mercury's picture

OK everybody, let's not rule out the possibility that Californians themselves have too slippery a grip on reality to report events accurately....

Tue, 03/20/2012 - 10:57 | 2273171 TradingJoe
TradingJoe's picture

If not even NOW people don't wake up well then...they have it coming and deserve it too!

Tue, 03/20/2012 - 10:58 | 2273177 LongSoupLine
LongSoupLine's picture

Maybe he bought a Beach Boys album in Arizona...claw back.

Tue, 03/20/2012 - 11:00 | 2273184 Mercury
Mercury's picture

Well, this is either a fuck-up or a conspiracy.  If its a conspiracy it won't be the only instance and tracking down some of the others will make the real story.

Tue, 03/20/2012 - 11:39 | 2273388 vs an army all alone
vs an army all alone's picture

No conspiracy. Same thing happen to me. They took 800.00 out of my acct. but the bank "only" charged me 75.00 :) Then the state suspended my corp. a few month later saying I did not file my 2006 tax return, even though they send me a check for that year.. when I finally got somebody on the phone and ask if this 800.00 had somthing to do with it the guy told me no he dosn't know why they took the 800.00 since my acct. shows a 2,400.00 surplus, so the suspension is only because they did not get my 2006 return. So I asked how do I get this suspension removed and he told me I can send him an addl. 900.00 and he can make it go away like it never existed. Or I can come up with the return and it will be removed also but stay on record for the whole time the company was suspended and I will never be able to collect a dime from anybody who did not pay us for the period it was suspended.

about a year and a half later they did send me back my 800.00 they stole plus 3.76 for interest in form of an IOU which nobody wanted to touch with a ten foot pole.

A year later they send me a letter saying they show that the IOU was never cashed and that I should send it back and will issue me a real check. It only took 3 years + to get my money back :(

Gotta love CA it's always sunny here.


Tue, 03/20/2012 - 12:27 | 2273613 bob_dabolina
bob_dabolina's picture

Sunny with a 90% chance of getting fucked

Tue, 03/20/2012 - 11:00 | 2273185 ZackAttack
ZackAttack's picture

More evidence that we're coming into a time where, if it's not defensibly in your physical possession, it's not yours.

Tue, 03/20/2012 - 11:43 | 2273405 IrritableBowels
IrritableBowels's picture


Tue, 03/20/2012 - 11:01 | 2273187 Doubleguns
Doubleguns's picture

Time to change banks for sure. Will Forgo (your money) if requested is obviously a bad choice.

Tue, 03/20/2012 - 11:02 | 2273191 Rainman
Rainman's picture

FTB's data entry clerks are morons. They routinely mis-route taxpayer payments with incorrect SS# entries. Communicating with these dolts is a NIGHTMARE, having gone through it myself 5 years ago on this very situation.

I have a tax CPA friend who is ready for the rubber room after years of dealing with FTB incompetence...over and over. He is forced to drink a lot.


Tue, 03/20/2012 - 11:03 | 2273195 William113
William113's picture

I hope this doesn't come to anybody's surprise Barry Obama put this in the healthcare bill. Do not keep money in the bank.

Tue, 03/20/2012 - 11:04 | 2273197 americanspirit
americanspirit's picture

At least one take-away from this story is to keep very little money in a bank account. Oh, and be sure that your available credit limits are low and there is not a lot of room on any credit card either - I'm sure that these thieves could just as easily charge your card as raid your bank account. I'm not sure if credit union accounts would be more secure than banks but it may be worth looking into. Finally if I were RT the very next thing I would do would be to go to small claims court and ask for a judgment against both California and Wells Fargo. Be sure to send them a registered letter letting them know when the court date is - that way when they fail to show up you can get a default judgment. Ask the judge to put a lien on any property that California and Wells Fargo have in your state, then go talk to your Justice of the Peace (if you have one) about collecting for you. Most people don't know that JPs can walk right in anywhere, anytime and seize property to enforce a judgment. If no JP in your state go to the county sheriff - you know, the one you voted for.

Tue, 03/20/2012 - 11:18 | 2273259 manhunter
manhunter's picture

Every bank and CU in the land complies with government demands to garnish your account. And employers will garnish your wages, too. It's mandatory.

Tue, 03/20/2012 - 11:04 | 2273198 Getting Old Sucks
Getting Old Sucks's picture

I see the day when laws are passed where the state you took your IRA and 401k deductuction in will be able to tax you on withdrawals no matter where you go.  Draw down those IRA's and 401k's now.

Tue, 03/20/2012 - 11:32 | 2273348 johnQpublic
johnQpublic's picture

already true for P.a.

Tue, 03/20/2012 - 11:04 | 2273202 HD
HD's picture

That's the beauty of the system. Any large entity - whether corporation or the government can say you owe them money. Good luck proving otherwise or winning in court.

Six or seven years ago I had a mistake listed on one of my credit reports. Took more than two years of jumping through hoops for me to "prove" the debt wasn't mine. The burden of proof was 100% on my shoulders. The credit agencies don't investigate anything - they just give you the run around hoping you'll give up.

Tue, 03/20/2012 - 11:24 | 2273287 WillyGroper
WillyGroper's picture

I've had 2 issues w/ credit reports. Both resolved w/ no hassle whatsoever. One was my ex using my credit. Don't know the SOL, should have been put in the HooseGow.

Tue, 03/20/2012 - 11:04 | 2273203 Long-John-Silver
Long-John-Silver's picture

Now we all know why our Great grand parents buried their money instead of keeping it in a Bank.

Tue, 03/20/2012 - 11:05 | 2273206 Richard Head
Richard Head's picture

Does anyone remember who Joe Stack was?

Tue, 03/20/2012 - 11:06 | 2273211 darkpool2
darkpool2's picture

Do wake up everyone.....the new normal is " he who fucks first...". Get it now?

Tue, 03/20/2012 - 11:14 | 2273212 Chuck Yeager
Chuck Yeager's picture

Nearly the same exact thing happened to me, word for word, except that I am a registered engineer and I moved to Oregon. Dozens of phoe calls, and sending four years of copies of fed returns did nothing. I finally sent a letter to the consumer complaint division and they finally removed the lien. The whole process took a year.

They are obviously floating artificial debits to prop up the system a little longer. Extend and pretend. The cracks in the system really are everywhere.

I am disgusted by my home state.

Tue, 03/20/2012 - 11:08 | 2273221 seek
seek's picture

I had the nearly same thing happen to me several years ago. Very similar story, I operate out of Arizona.

The cause was one of my California clients filing a 1099 for payments they made to my corporation. All the work I do is in AZ, so they had no claim, and my CPA pretty much told them to fuck off.

Them going directly into bank accounts is a new spin. I'm guessing this will be more common in the future. All the more reason to add to the stacks of physical. Funny thing, relocating PMs takes considerably more effort than making an accounting entry.

Tue, 03/20/2012 - 11:08 | 2273222 pods
pods's picture

Many have stated outrage over this.  It just does not make sense to them, so they are outraged.

If you entertain the fact that they OWN you, it makes sense.

Tax on labor is slavery, the percentage is irrelevant.

When you wake up and realize that they own you, it will make sense.  But the journey to get there sucks.

Trust me.


Tue, 03/20/2012 - 11:38 | 2273380 acetinker
acetinker's picture

I don't need to trust you, pods.  I know what you say to be true.  Sadly, it seems we few individuals have but two choices left- 1) Go Postal, 2) Go Galt.

Tue, 03/20/2012 - 11:08 | 2273223 GMadScientist
GMadScientist's picture

Robert Thompson? Gee, I wonder how many there could be. So much ado about a wrong address.

Tue, 03/20/2012 - 11:11 | 2273233 rlouis
rlouis's picture

Deperate for FB IPO

Tue, 03/20/2012 - 11:14 | 2273240 wombats
wombats's picture

Corruption is now part of the business model and semi-official policy of gov'ts.

Tue, 03/20/2012 - 11:14 | 2273241 haskelslocal
haskelslocal's picture

Tyler. We get New of The World imploded, yet filling space with such National Enquirer garbage is a low move man...



Tue, 03/20/2012 - 11:15 | 2273245 poor fella
poor fella's picture

Keep that receipt...  and keep quiet..  or else.

Should he now expect the 'else'?

Tue, 03/20/2012 - 11:15 | 2273248 Catullus
Catullus's picture

Is the myth that "taxes pay for society" destroyed yet? That's been a golden oldie for awhile now.

Can't wait until the Feds bailout states for dumping money into NFL stadia bonds. Paying for "society".

Tue, 03/20/2012 - 11:16 | 2273251 WTF_247
WTF_247's picture

If you leave the state of CA, it would appear wise to close all bank accounts opened in CA.  I do not think they can go into a bank account in another state and take your money - not sure there but my guess is no.

Re-open new accounts outside of CA and they would have a harder time doing this - although the fact they can do it in the first place is just wrong.  I am sure they would not care about causing your account to go negative either - causing further issues.

Tue, 03/20/2012 - 11:22 | 2273275 manhunter
manhunter's picture

They will send copies of the garnishment order to every bank anywhere, if they think you have an account there. You can't hide.

Tue, 03/20/2012 - 14:09 | 2274060 Da55id
Da55id's picture

This is factually correct. I conducted a seminar in CA in 1986 in a series of seminars across the country. No other state had an issue except CA. I never received any letter from them, but when I went to sell my house in 1991, why - my goodness - to my utter surprise, there was a lein on the house for several hundred dollars from CA. had to clear it to sell. Now, if they had had the decency to send me a letter when they first decided there was an issue, it could've been cleared. So, this is not new tactics. It's just that now that there's an internet, it's possible to cross correlate these experiences so no one can hide their unfortunate tactics any longer.

Tue, 03/20/2012 - 11:17 | 2273256 San Diego Gold Bug
San Diego Gold Bug's picture

Another reason to keep most of your money in physical gold and silver!  Never keep your physical in a bank safety deposit box for the obvious above reason as well!!

Tue, 03/20/2012 - 11:18 | 2273262 chumbawamba
chumbawamba's picture

FTB sent me a notice that I hadn't filed back in like 2009.  I replied telling them I had no tax liability for that year, so they sent me back a letter to the effect of, "Oh, OK."

I am Chumbawamba.

Tue, 03/20/2012 - 11:23 | 2273278 AN0NYM0US
AN0NYM0US's picture

I've often said that if I were homeless Ocean Park (Santa Monica) would be my first stop

Tue, 03/20/2012 - 11:24 | 2273280 Bastiat
Bastiat's picture

Colorado did the same thing to me, billing me for CO state income taxes the year AFTER I moved--and for an outrageous amount. Somehow they got hold of my brokerage records and billed me on income for the entire amount of all securities sales (no netting of cost).  They DEMANDED proof that it was not payable beyond the the proof that I never lived there during that year.  How many people, for lessor amounts, just give up and pay?  Enough to make it worthwhile you can sure.

Tue, 03/20/2012 - 11:23 | 2273281 Stuck on Zero
Stuck on Zero's picture

My personal opinion is that if you have to deal with a tax entity California is a lot nicer than the Feds. 

Tue, 03/20/2012 - 12:31 | 2273631 blunderdog
blunderdog's picture

Have you dealt with both?  'Cause that sounds totally bass-ackwards to me.

The Feds were the very last group to actually begin proceedings in my experience, while the states (NY and FL) were both hair-trigger at the garnishment and confiscation steps.

I've come to understand that local power gets exercised first.

Tue, 03/20/2012 - 11:27 | 2273307 passwordis
passwordis's picture

My brother received a letter stating he owed $20K in federal income taxes. The letter was so poorly written that we thought it was fake but it turned out to be genuine. 

 I'm not giving out advice but I can tell you what he did, he completely ignored it and didn't respond in any way. We were told that once you respond and dispute the claim you've created a legal dispute which now must be adjudicated.  

If you do not dispute the claim they are limited in what they can do.  That's the way we understood it.  Do not respond in any way! That was at least 10 years ago... He hasn't heard from them.

Tue, 03/20/2012 - 11:57 | 2273483 i-dog
i-dog's picture

By not responding you are automatically in dishonour ... and they can file default judgement against you.

ALWAYS respond ... but NOT with a dispute (as you correctly state). Agree that you wish to accept their offer to contract and that they should therefore submit full documentation supporting the amount of their claim together with documentation of the authority they are claiming to contract with you. Always request further and better particulars until they hang themselves.

I'm sure Chumba can explain it better.

Tue, 03/20/2012 - 13:45 | 2273957 harposox
harposox's picture

It's called requesting proof of "validity" of the debt, and you have 30 days within receipt of a debt collection notice to do it. Good idea to always do this, as it throws the burden of proof back on the collector. There are plenty of resources/sample letters for this available online... also good to check out your rights under the "Fair Debt Collection Practices Act."

Obviously it won't deter a determined creditor/collector, but it might scare away one with incomplete information... and if nothing else it signals a willingness to be a gigantic pain in their ass.

Tue, 03/20/2012 - 11:29 | 2273322 boiltherich
boiltherich's picture

This reminds me of when I was judged to have defaulted on a student loan in 1988, it was a government backed Stafford loan as they all are, issued by a private bank which checks your eligibility and then sits back and collects the interest, if you ever go into default on the loan they get to shed the risk by dumping the loan onto the taxpayers who make them whole upfront.  In my case an error by a college employee was the only thing that put me into default, but once in default I could get no more student aid and there was no agency like the California Franchise Tax Board to whom I could appeal. 

In the case of RT if he does not owe the money he will have his funds returned, though I agree with the rest of you that the practice is as predatory as any that scum debt collectors use to pry money from debtors who cannot pay.  I am sure that many of the tax billings will be small enough that a lot of people will simply not fight it since the cost of fighting is more than the bill.  But, why would this RT have his funds in a Wells Fargo account?  It is one of the Big 3 of customer abuse in American banking. 

With above student loan (total owed $2,200) the agency had the power of the IRS at their disposal, any and all tax refunds were confiscated and applied to the interest on the debt which with fees and penalties and interest was pretty quickly doubled.  And the thing was, I never once got a letter telling me who to contact or what my appeal rights were.  As far as I could tell there was nobody I could contact about it at all, not even to pay the damned loan off.  Now you can go to their website and click on student loans, but back then there was no such tool.  I finally got a degree in finance in 1996 under the Veteran Administration Chapter 31 program, and a decent job in 1997, and wanted to buy a house in 1999 but could not get a VA home loan because of this uncleared student loan which 11 years after that bitch in the college triggered was now about $5,000.  Even after 11 years of confiscations and ruined credit.  But, now they did have collections consolidated in Texas and I managed to get a phone number for them, I was able to negotiate settlement for the original $2,200 principal. 

I lost a lot more than a few bucks to this tax authority life ruining bureaucracy, I lost most of my best productive years of my life when others are building their careers and making roots and families, by the time the nightmare ended I was in my forties, and had never had a credit card or a dependable car.  I came very close to just leaving the USA for good and my opinion of the nation is no longer what it once was. 

Tue, 03/20/2012 - 12:11 | 2273346 Wakanda
Wakanda's picture
"Welcome To The Predatory State of California"

Welcome to the Jungle

Tue, 03/20/2012 - 11:36 | 2273368 passwordis
passwordis's picture

 I honestly do not understand why anyone would use a bank to hold their money. It did'nt make sense to me 25 years ago and it makes far less sense to me now.  I have business account in order to cash checks. but I haven't used a personal account in 25 years at least..

 My wife stopped using banks shortly after meeting me... about 15 years ago.  A great feeling to control your own money and have access to it at all times.

Tue, 03/20/2012 - 11:38 | 2273383 Below Zero
Below Zero's picture

He probably owes them some money from the time frame he moved from California or they think he does and they are just rolling over a demand for taxes. California sends everyone a tax bill that moves from the state claiming you owe money. They are especially nasty if you don't move out on Dec 31st and will argue forever that you were a resident even if for a day trying to tax the whole year of wages.  Its called fishing. 

Tue, 03/20/2012 - 11:39 | 2273387 mc_LDN
mc_LDN's picture

Surely in the USA a group could come together to sue?

Tue, 03/20/2012 - 12:40 | 2273672 bank guy in Brussels
bank guy in Brussels's picture

Ha! - US judges work for the oligarchs, and they protect crime and fraud by government agencies. 'Case dismissed'.

The reality of USA courts and judges, is nothing at all like on Hollywood movies and TV.

The background of most official crime in the US, is the criminals' assurance that American judges will do nothing about it.

Tue, 03/20/2012 - 11:43 | 2273407 VyseLegendaire
VyseLegendaire's picture

"Perhaps it's because government/bank thievery and Catch-22 incompetence is now the backdrop of our culture."


Tue, 03/20/2012 - 11:49 | 2273437 lolmao500
lolmao500's picture

Well if we hear ONE CASE... that means there's HUNDREDS of them at least.

Tue, 03/20/2012 - 12:35 | 2273444 digalert
digalert's picture

In 2010, one business every week left California. Five businesses left California every week in 2011. The liberal progressive democrat land of fruits and nuts Kalifornia doesn't have a fucking clue...really. Currently the state is looking to raise taxes.

In 2009 California issued 101,930 IOUs covering more than $389 million in payments.

Tue, 03/20/2012 - 11:50 | 2273452 sbenard
sbenard's picture

Perhaps R.T. should ask the Thief in Chief -- the one in the White House -- what happened. After all, in present-day Utopia, also known as the People's Republic of the United States, there is NO private property any more!

Tue, 03/20/2012 - 11:52 | 2273467 sbenard
sbenard's picture

I moved from the People's Republic of Kalifornia in 2003. I'm glad I closed all my bank accounts there! Sink or swim, Kalifornia!

Tue, 03/20/2012 - 11:57 | 2273481 sbenard
sbenard's picture

Emperor Obama's latest budget proposal included higher taxes on the rich, but according to the CBO's estimates, that will only cover 5% of the deficit. FIVE percent! Eventually, this will happen to ALL of us, since the only way we can pay our bills is to confiscate ALL private property!

Welcome to Amerika! We are ALL serfs now!

Tue, 03/20/2012 - 11:57 | 2273482 wally_12
wally_12's picture

Oh oooo

Now I know why that black Chevy SUV with dark windows and Kalifornia plates is driving by my house in the evening. I purchased a spare magazine from Triple K in San Diego. Works great! May need it for self defense here in Michigan.

Tue, 03/20/2012 - 11:58 | 2273486 TruthDetector
TruthDetector's picture


You be the judge…

Tue, 03/20/2012 - 11:58 | 2273488 TruthDetector
Tue, 03/20/2012 - 12:40 | 2273674 jomama
jomama's picture

here with go with that godder shit again...

Tue, 03/20/2012 - 11:58 | 2273491 Abiotic Oil
Abiotic Oil's picture

The thing to remember is Kali is broke and they do not own their own printing press.

Oh boy when those welfare checks stop rolling down there...

Tue, 03/20/2012 - 11:59 | 2273495 lolmao500
lolmao500's picture

Exodus: California Tax Revenue Plunges by 22%

State Controller John Chaing continues to uphold the California Great Seal Motto of “Eureka”, i.e., 'I have found it'. But what Chaing is finding as Controller is that California’s economy as measured by tax revenues is still tanking. Compared to last year, State tax collections for February shriveled by $1.2 billion or 22%. The deterioration is more than double the shocking $535 million reported decline for last month. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011.

Tue, 03/20/2012 - 12:04 | 2273514 exodus11
exodus11's picture

The commercials tell me to "JUST SAY NO". That's a good plan.

Tue, 03/20/2012 - 12:06 | 2273519 Bartanist
Bartanist's picture

Theft is still a crime in California, no?

If there is systemic theft, maybe the police or FBI would take interest.... I mean really, until it is investigated there is no certainty that the funds are not going into someone's personal account, eh?

Tue, 03/20/2012 - 12:23 | 2273595 Civil Shepard
Civil Shepard's picture

Had the same thing happen to me in 2004-5.   Cost me $25,000.   At the time, I lived in Chicago with a home-based business.  I hired/employed a computer consultant who resided in New Jersey but who traveled for me to client sites thoroughout the USA.      New Jersey saw my unemployment contributions and promptly claimed that I had "nexus" in their state... meaning I was viewed as operating a business there.  Of course, I had no presence there... we didn't even do work in NJ.    

New Jersey sent me a demand letter to file state returns for several years, and "estimated" a fine at $25,000.   

A good tax attorney protested repeatedly but got no where.   I fired the employee and paid the fine to stop NJ proceedings. 

What I learned was: never hire an employee in a tax-aggressive state like NJ and CA.   Google "nexus income tax" and notice how many have been burned by New Jersey's abuse.

Tue, 03/20/2012 - 12:26 | 2273609 Moon Pie
Moon Pie's picture


As goes goes the rest of the country....or something like that.

Tue, 03/20/2012 - 12:31 | 2273629 dirtbagger
dirtbagger's picture

Never had a problem with the CA Board of Equalization when we lived and ran a manufacturing business in LA.   But zap - since we moved away a decade ago, have had 3 separate attempts of CA to illegally take our $$$. 

Tue, 03/20/2012 - 12:33 | 2273641 Clowns on Acid
Clowns on Acid's picture you think that Kali is sending those tax notices to addresses in Mexico?

I mean come on, they have to keep La Raza well funded to complete the occupation of the state.

Tue, 03/20/2012 - 12:36 | 2273646 JLee2027
JLee2027's picture

I'm hearing in California they are collecting (ie. demanding) you pay taxes on invoices your business submitted to the State that haven't been paid yet. Now think about that one, lol.

Tue, 03/20/2012 - 12:38 | 2273663 jomama
jomama's picture

ahhh, those douchebags at the FTB!

three weeks ago, i received a letter claiming they don't believe i filed in two years ago, when i made over 6 digits for the first time.  those mother fuckers said if i didn't reply within the two week date, a 15% penalty would automatically be assessed on the projected tax due.

i printed out my return. sent it, and really had to refrain from telling them to go get fucked by a 4" wide barbed metal spike!

Tue, 03/20/2012 - 12:44 | 2273686 lolmao500
lolmao500's picture

Kommiefornia... I can't wait for Cascadia to go off...

Tue, 03/20/2012 - 12:44 | 2273691 ddtuttle
ddtuttle's picture

This is actually a major industry where I live.  I live in Nevada about 1 mile from the California border, and own real estate in California.  This describes most of my neighbors as well.  It is well known how aggressive CA can be in trying get money out people in our situation.  They can get copies of your cell phone bill with tower locations to see where you've been, cable bills to see where you're ordering movies, credit card bills to see where you're making purchases etc. I cannot have my doctor, dentist or lawyer in California, and they will even pursue me if I by groceries in California, 1 mile away.    They will do nearly anything to prove you spent more than 183 days in California thus making you a resident and therefore a taxpayer.  

I would tell you what my neighbors do to thwart them, but who knows who's reading this ;^)  Since my income comes from a completely different state, I have no obligation or desire to give California 11% of it for nothing.  If they threaten me, I will sell my CA real estate immediately.

BTW: I used to live in NYC, and at 12.8% their taxes are even worse.


Tue, 03/20/2012 - 12:58 | 2273762 proLiberty
proLiberty's picture

One way to deal with this is to keep your financial assets out of reach of tax-grubbers.    With FACTA that is becoming more difficult, but not impossible.

For example:


Anyone know of any banks in Singapore or Hong Kong that accept accounts from citizens of the land of the UsedToBeFree?




Tue, 03/20/2012 - 13:42 | 2273953 malek
malek's picture

You're sure Swissquote takes US citizens as new customers?

I had an account there and was happy with them, but they made a big fuss in 2003 or when that first "anti-money-laundering" law came into effect.

Tue, 03/20/2012 - 17:28 | 2274868 smiler03
smiler03's picture

"Access to this website is not permitted for persons who are subject to this restriction. This applies in particular to persons domiciled in the USACanada,Great BritainGermanyItaly, and France."

Tue, 03/20/2012 - 13:10 | 2273814 holdingontomypants
holdingontomypants's picture

The answer is quite simple why he is getting a tax bill for 2006. Somebody is using his identity to work and they checked 15 exemptions on the W-4 form so no state or federal taxes get witheld. Then at the end of the year the employer sent in the W-2 with gross earnings reported and have a tax bill. Expect to see the 2007-2011 tax bill coming soon also. IRS will be next and if you are drawing social security right now expect issues from them to as they will say you earned more then the exempted allowable threshold and as a result you were overpaid by socia security.

Tue, 03/20/2012 - 13:23 | 2273870 Uinta
Uinta's picture

During the 1990's California tried to tax the retirement pay of non-resident military retirees if they had ever been stationed in California during active duty. California lost the eventual litigation, but it's memory serves to back up Charles Hugh Smith's story. Welcome to the Hotel California. You can check out anytime you like, but you can never leave.

Tue, 03/20/2012 - 13:24 | 2273873 atomicwasted
atomicwasted's picture

Another new tactic of the kleptocracy is to not mail out the usual DMV renewal notices ahead of time, but only mail them out after the deadline for payment is due so that you have to pay the extra $140 penalty to register your car.  I plan to vote for every bond on the ballot this fall - the state of California can't default and collapse fast enough for me.

Tue, 03/20/2012 - 13:29 | 2273896 Fox Moulder
Fox Moulder's picture

I recall seeing a story a few years ago about a woman who received a huge income tax bill from California. Seems she graduated medical school and got her license. She never did start her practise but the bill was for money she *COULD HAVE EARNED* if she did.


*too lazy to try to find a link*

Tue, 03/20/2012 - 13:29 | 2273897 Trader47
Trader47's picture

Its happening everywhere,,

My friend runs a Villa rental agency in Portugal,, the Tax office, came after him fot paying social security contributions for 4 years,, and froze his buisness account,,

He was paying National Insurance contributions in UK during that period and was told that he did not have to pay in both countries,, he has private medical, not claiming anything

They agreed he pay the 13,000 Euros over the course of 5 years, and told him he needs to pay SS contribution from now on, although he is paying in the UK, Tax authorities, agreed, but they wanted a lien on his house,,,so they took his house as collateral

Whe verything was done the Bastards, took the money out of his account, they still have the charge on the house,,and he has to pay the monthly payment for the amount which was owing,,

Welcome to New Economic World Order


Tue, 03/20/2012 - 13:39 | 2273931 AndTheRest
AndTheRest's picture

Showing individual initiative in creating economic activity is a high crime in a centrally planned socialist nation.  They'd much prefer your friend be unemployed and on the dole.  That would keep him nicely subservient to the bureaucrats that control his ability to eat.  When people take care of themselves and earn their way through life they may start to question whether the massive central government micro-managing all aspects of human existence is needed at all.


And we can't have that, can we?

Tue, 03/20/2012 - 13:33 | 2273899 AndTheRest
AndTheRest's picture

Calfornia, when it was full of white people, had the highest standard of living world wide.  And hope for the future.  The sky was the limit.


But those days are gone forever.  Demographics are destiny, and California's destiny can be clearly observed in the drug cartel ruled barrios of Mexico.

Tue, 03/20/2012 - 13:35 | 2273909 thurstjo63
thurstjo63's picture

Not at all surprised. A very strange place indeed. I recently heard about them raiding and jailing two individuals who own a collective where they participants share raw milk among themselves on trumped up charges while in France you can now buy raw milk from a dispenser! See this

Tue, 03/20/2012 - 13:48 | 2273971 CuriousPasserby
CuriousPasserby's picture

As I keep saying, DON'T use a national bank, that has branches in other states. Use a local in-state bank or credit union.

Tue, 03/20/2012 - 14:10 | 2274065 SmittyinLA
SmittyinLA's picture

I'm sure there's a bigger fraud, CA no doubt "securitized" their fabricated "tax debt book" and borrowed 12X what they claim is owed in back taxes-and then spent the cash on crack.

Tue, 03/20/2012 - 14:42 | 2274200 AGuy
AGuy's picture

Welcome to Hotel Taxifornia. You can check out any time you like, but you can never leave.

Tue, 03/20/2012 - 14:57 | 2274267 ReligiousAtheist1
ReligiousAtheist1's picture

Hahahahahaha Awesome comment liking the "Eagles" refrence

Tue, 03/20/2012 - 14:55 | 2274253 ReligiousAtheist1
ReligiousAtheist1's picture

Another excellent piece by C.H.S i suspect in the years to come this will be nation wide

Tue, 03/20/2012 - 15:50 | 2274509 Bitchin Bear
Bitchin Bear's picture

It's not just California.  During the process of renewing a commercial building loan my banker asked me BTW in running your credit we have discovered a lien by the State of Georgia on you.  After 40 days and 40 nights of holding on the phone it seems that it was sales tax due on an auto purchased out of state in 2002 but the lien wasn't filed until 2009, conveniently just before the 7 year statue of limitations ran out.  I had no knowledge of this whatsoever and had moved from my then current address seven years ago.  I did however come across one kind, helpful State employee who said the state probably took the highest possible value of the car and based the tax due on that.  Long and short is that I supposedly owe almost seven grand in penalties and interest on what would have been about $1,200 in sales tax.  These states are so hard up for money they will resort to anything.  Now I have to determine if it is going to be more costly to hire an attorney or just pay the damn money.  Bastards!

Tue, 03/20/2012 - 18:47 | 2275107 three chord sloth
three chord sloth's picture

Add me to the list. I am getting notices for California taxes I supposedly owe... for 1991 and 1996! The taxes I supposedly owe to them are small, only a few hundred dollars, but the fines and interest are in the thousands!

The thing is, there is no way for me to fight it. How can I prove I filed a return when they say I didn't? My copy (if I still had it) doesn't prove I mailed it or they got it... so the "non-filing" fine is unfightable. And because they say I never filed, there is no statute of limitations... a perfect "gotcha"!

Plus who in the hell still has copies of taxes paid 20 years ago... especially 1040EZ taxes? There's nothing to deduct, nothing to dispute, nothing to fuss and fight over.

So now I have no option but to ignore them. I ain't paying them... no way, no how... and I can't fight 'em. So all I can do is keep my bank balances low for the rest of my life... because California believes in Eternal Obligations. Fuck 'em.

Tue, 03/20/2012 - 19:15 | 2275188 laomei
laomei's picture

This happened to me a while back as well. I just faxed them copies of resident permits showing that I do not live there and did not live there for their tax-year.  Simple as that really.  No fighting required.  Then they go down the list to some other sucker who will probably be forced to cough it up (like you)

Tue, 03/20/2012 - 19:48 | 2275283 three chord sloth
three chord sloth's picture

I actually did live and work there. My issue is with their claim that I didn't file taxes, and then waiting more than a decade to inform me of my "oversight".

Tue, 03/20/2012 - 19:16 | 2275191 jackpile
jackpile's picture

Charles, scary shit. This happened to us last year in a slightly different way. Gonzalo Lira wrote about our plight here (details): I wanted to fight it but we were too busy and the amount was so small to spend the tim. Of course we discovered quickly that this was 100% unconsitutional (we checked). Can't wait to get outta here.

Wed, 03/21/2012 - 00:56 | 2275865 StockMarketBott...'s picture

A Stock Market Bottom At The End Of This Decade

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