State officials challenge lawsuit claiming Ohio illegally double-taxes some residents

COLUMBUS, Ohio— State Treasurer Robert Sprague and Ohio Tax Commissioner Jeff McClain have fired again in opposition to a lawsuit filed by two Northeast Ohio taxpayers who say the state “double-taxed” them and hundreds of different taxpayers who don’t have W-2 varieties.

In briefs filed Tuesday with the Ohio Supreme Courtroom, Sprague and McClain argued that the court docket ought to dismiss the lawsuit filed by James Palm of Akron and Sara Pearson of Ravenna.

Their briefs supplied a number of causes, together with that the plaintiffs haven’t gone by the standard tax attraction course of, the state legislation they’re counting on to make their case doesn’t apply to particular person taxpayers, and the 2 taxpayers haven’t proved they’re owed any cash.

Palm and Pearson say of their swimsuit that when taxpayers can’t present W-2 data on their state tax returns, both as a result of their W-2s have been misplaced, destroyed, or by no means issued within the first place, the state instructs them to record on their tax submitting that no state earnings tax was withheld by their employers, even when their employers did withhold tax.

Palm mentioned that he couldn’t get his W-2s from earlier years as a result of the Greenback Tree he labored at closed down. Pearson mentioned her estranged husband both destroyed her W-2s or mailed them to his mom’s home as a substitute of her.

Palm claimed an Ohio Division of Taxation worker advised him that, as a result of neither he nor the state knew how a lot his employer withheld, he ought to report that no cash was withheld. The state now says he owes $49.12 in unpaid earnings taxes. When Pearson filed her taxes, she put “unknown” within the field for state earnings tax withholding; the lawsuit asserted the state modified that to “zero” and that Pearson needs to be entitled to a tax refund.

Sprague and McClain, in separate court docket briefs, every asserted that Palm and Pearson shouldn’t have gone straight to the Ohio Supreme Courtroom. As a substitute, they acknowledged, the 2 ought to have petitioned McClain’s workplace for a tax reassessment.

If the reassessment wasn’t of their favor, they continued, the plaintiffs ought to have despatched the matter to the Board of Tax Appeals. Provided that the board dominated in opposition to them ought to Palm and Pearson file a lawsuit in state court docket, the 2 officers argued of their briefs.

Palm and Pearson declare of their lawsuit that they “can’t prevail by the Board of Tax Appeals” as a result of there’s no details about how a lot tax was withheld and despatched in by their employers.

Sprague’s transient, filed by Affiliate Assistant Legal professional Normal Allison Daniel, known as that argument “hypothesis” and asserted the plaintiffs couldn’t “short-circuit” the tax-appeal course of.

Dana Goldstein, an lawyer with Akron-based Neighborhood Authorized Assist who represents the plaintiffs, mentioned in a earlier interview that the state’s coverage notably hurts poorer Ohioans, as they’re much less more likely to get W-2s yearly for a number of causes, together with that they’re extra more likely to maintain seasonal or part-time jobs or they have an inclination to maneuver extra typically than wealthier residents.

Nevertheless, Sprague’s transient challenges that assertion, saying that “taxpayers can hardly allege a ‘systemic failure’ … after they haven’t even used statutorily supplied avenues for difficult particular person tax assessments.”

Sprague and McClain additionally say that the plaintiffs’ primarily based their case on a bit of Ohio legislation that solely applies to funds from state entities. “It has no software to particular person taxpayers,” acknowledged McClain’s transient, filed by Affiliate Legal professional Normal Christine Mesirow.

Sprague’s transient says that Palm and Pearson haven’t proved they’re entitled to the tax refunds they’re searching for, as they haven’t proved that their employers withheld and paid any earnings tax on their behalf.

Sprague’s transient additionally says that he shouldn’t be concerned within the lawsuit, because it’s as much as McClain, not him, to deal with tax refunds.

The case was referred for mediation shortly after it was filed final August. However mediation didn’t resolve the case, so the court docket returned it to its common docket earlier this month.