PDA

View Full Version : Please help me figure out this IL vehicle tax issue


iftheresaway
04-27-2012, 09:09 PM
TLDR summary: Stepmom gave me dad's car after he died; IL Dept. of Revenue says I owe extra taxes and I'm not sure why or if I can fix it.

My father passed away in October 2011. My stepmother gave me his car. When I titled the car in my and my husband's name, I was told that I had to put down a purchase price, because a stepparent doesn't count under Exception 2c, "Transferred or purchased from spouse, parent, brother, sister, or child." I pointed out that it really was a gift, my father was unavailable to do the gifting on account of being dead; they put down $100 for the purchase price. They checked their value tables for Illinois form RUT-50, and I paid $165 in tax. Everyone seemed a bit confused by the process, and they suggested that I have someone look at it again when I did my taxes.

Which I did. My accountant said I didn't need to do anything else. Fast forward to last week, when I received a notice in the mail from the IL Dept. of Revenue saying that they'd processed our form RUT-50, and we didn't make full payment by the required due date. The letter additionally states that they did an independent valuation and determined the vehicle's value to be more than we reported (it's certainly worth more than $100, we just didn't pay that on account of the whole gift thing). I took all this into my accountant, and she said, "Hmm. I don't really see many of these, so I'm not sure what to do with it. You should take it to the titling place, they'll probably know what to do." (As you can imagine, I'll have a new accountant next year).

The letter says that if I do not agree, I must send a copy of my bill of sale or a dealer's assessment of the fair market value. So, here are my questions:

1) Can I just have my stepmom write a bill of sale for $0 (or $100, I guess)?
2) Should the titling company have initially checked either Exception 2a (estate gift for beneficiary - not surviving spouse) or 2c (Transferred or purchased from spouse, parent, brother, sister, or child)? If yes, can they amend the form to say that?
3) The letter states that I can protest in writing and request an administrative hearing. Do I still have to do that if I can produce a bill of sale or they amend the form?
4) Is there anyone else who can help me figure this out? Should I look for another accountant ASAP and have them handle this?

Please feel free to ask for more information if this is unclear; I'm definitely confused about this whole process. Thank you for any advice!

Nothar
04-28-2012, 01:44 AM
It would seem that for that form, for vehicles which were gifts, you are required to pay tax based off the fair market value of the vehicle. You receved a notice becase you listed $100 as the purchase price and I assume paid tax based off that amount instead of the FMV.
I would look to see what FMV the state is trying to assess your vehicle at and dispute that if you think it is too high based off mileage, condition, etc. It would appear that you will owe some additional tax though because of the error on the originally filed RUT 50.

Nothar
04-28-2012, 01:57 AM
Also, to add to what I said above, I would check to see if a step-parent is considered the same as a parent, as you would only have to pay $15 total if you could claim that exception.
In a quick google search I did not see any info on that subject.

iftheresaway
04-28-2012, 10:21 AM
Also, to add to what I said above, I would check to see if a step-parent is considered the same as a parent, as you would only have to pay $15 total if you could claim that exception.
In a quick google search I did not see any info on that subject.

Thanks. That's one of the things I've been trying to figure out, since the title clerk initially said no, but the accountant said the IRS usually treats the as equivalent.

ok11
04-28-2012, 04:22 PM
This court case (http://tax.illinois.gov/legalinformation/hearings/mv/mv00-2.pdf) (pdf) mentions a transfer "from M and H jointly to C (where C is the natural child of M and the stepchild of H)." Since there's a distinction drawn between natural and stepchild, it seems that for purposes of the Illinois Vehicle Use Tax, a stepchild would not qualify for the $15 tax rate.

iftheresaway
05-03-2012, 02:28 PM
Bump for the business week - does anyone know if I can go the bill of sale route and be ok?

Best Topics: basf ads transposed number red bull taste heart auricle jesus short cleveland show sucks marshal's baton chubb institute frog japanese peyton manning penis smart pills joke i swanny jim reeves autopsy gigatons to teratons throat voice changer crossed eyed girl big bladder mexican tv dinners calories in pho glue for neoprene wax scalp kissing noise walgreens mistletoe eharmony rejection bull fighting music towel dry hair see later alligator nyquil recommended dosage chainmail vs bullet ornamental orange tree chinese restaurant tea is gallium dangerous why does flash player update so often cdl eye test chart what temperature is boiling water on a stove last of the mohicans weapons the high king of montival sleeping in hotel parking lots why do i feel like i have to pee after i already peed if the creek don't rise saying i don't shit where i eat what is the difference between the ss and the gestapo tuck tie into shirt what is prn means how long does it take to get a tooth pulled why does lead block radiation why is the medal of honor a pentagram better to remain silent and be thought a fool meaning best radiator stop leak reviews can asian and african elephants breed crock pot for one person difference between spa and hot tub damned by faint praise coax to hdmi converter amazon obvious child paul simon lowes wood cutting service hands across the water meaning how to muffle wind chimes spider plants and cats is that you john wayne is this me explained how to get a power window up getting sick after working out uses for ball peen hammer good songs to cover in a band can you take percocet and dilaudid together