I was contacted two months ago by a collection agent about supposed delinquent state taxes from when I lived in Virginia over ten years ago. The State had never contacted my from 1997 until today regarding any taxes that I owed.
Today I get a letter from the Commonwealth of Virginia, stating I owed nearly $3,000 in taxes and penalties from the 1996 tax year.
The letter demands 100% of my salary after Federal and state taxes and child support are taken out.
I filed state tax returns (and got refunds) for 1997 and 98. Never once did they say anything about past taxes owed.
They included a chart that showed if I had financial hardship, I am able to exempt some of my wages from the 100% they want. Trouble is, I do not make even what the exempted amount would be, so in theory, I would never be able to pay this debt off.
Says its a 3-year statute of limitations except for various exceptions listed (failure to file, filing a false return, etc.). If you've been told the reason why they think you owe money, then you might be SOL. redsoxnation is right, though, that maybe you can get them to reach a compromise.