The county in which I live is part of a Regional Income Tax Authority (RITA).  This is a collective regional tax that pays for shared services (such as mass transit) but also is a collection agency for municipalities who don’t have the budget/staff to have their own City Tax Office. RITA collects the city income taxes and distributes them back to the city in which you live.  I have no problem at all paying my taxes but this system is insane and I just don’t understand it.

We moved in to the system in December of 2007 and had no idea about RITA.  I just assumed that like at all my previous employers the appropriate local income taxes were taken out of my check.  Fast forward to early 2009 when we got a summons to appear at RITA for back taxes missing from 2007.  Apparently because the county has so many cities and each city has a different tax liability, most large employers don’t take RITA taxes out of your check and leave the responsibility up to you.  We were told this was common. Plus, you pay taxes not only for the city in which you live but the city in which you work.  That means we owed taxes for 3 different cities and what you pay in one city will impact what you owe in another.

We gathered up all the needed paperwork and arrived at the scheduled time.  A RITA representative went over everything, explained what we owed for the 2 ½ weeks we lived here in 2007 and we wrote a check for less then $100.  She said it was all we owed; we were now current and paid in full.  She then told us that she set everything up in the system and we would get quarterly reminders from then on and that since the taxes were paid in arrears all the funds paid in 2009 would be for the 2008 tax year.  When we got them we promptly paid them – each of the bills was only a few hundred dollars. 

Fast forward again to early 2010 when we again receive a summons to appear at RITA for back taxes.  This time I was pissed off – we went last year! We paid every bill they sent! What the heck did we do wrong now? So several weeks ago we both took the morning off work and went through the motions again.  This time, the RITA employee said we owed thousands in back taxes for all of 2008 and 2009.  I showed her all the paperwork from the previous meeting, told her we paid all the bills we received and didn’t understand why we owed so much more.  She plodded away on her lap top, compared my paperwork to her screen and finally told us that the woman who helped us in the previous year entered horribly flawed information which meant that we only paid a tiny fraction of what we really owed.  And to make matters worse, the previous woman flat out lied when she told us the taxes were paid in arrears – they are actually paid for the current year! And we had no recourse…after all it’s our responsibility to know what we owe …and even though their own employee had done the calculations and signed off on them we were left to pay the owed amount (fine) plus interest and a penalty (not fine, but we had no choice).  

So, at the suggestion of this new woman, we wrote a modest check that day then took the paperwork she had helped us fill out and went home register for their on-line reminder and payment services.  She said that when we logged on the full amount we owed would show up and we could pay it on-line.  We could also sign up for email reminders for upcoming quarterly payments since it turns out we were only sent 2 reminders the previous year (a “quirk in the system” we were told).  She suggested we wait a few days so the small payment we made would be deducted from the amount owed, then to pay the full balance shown online and we would be up to date.

We did just that and the numbers online matched the paperwork she gave us.  We paid the full balance and, per her oral and written directions, thought we were finally current on payments for all of 2008, 09 and the 1st quarter of 2010 and would receive the next reminder for 2010 taxes by early March.  Last week we got our reminder, which again says we owe well over a thousand dollars, including new interest and penalties for unpaid 2008 taxes.  WHISKEY. TANGO. FOXTROT?!

I don’t get it.  I don’t understand this system at all.  I understand taxes – I do my own state and federal taxes every year.  But this? I just don’t understand.