Error on Tax 2018 Taxes

Hi everyone,

I have a tax question related to a potential background investigation for one of the three-lettered federal agencies I’m applying to. I am currently not in the process of the BI, but I’ve gotten pretty deep in the application process, and it’s becoming more likely that I may reach that point.

Anyway, with that little caveat out of the way, here is my concern/question. For the last several years, I have lived with my parents. For one of those several years, I had an apartment in a neighboring city. Now, during that year, I split my time between both my parent’s house and my apartment. I was frequently at both, but I always considered my parent’s house to be primary residence because I knew I’d only be at my then apartment for a short period of time. Here’s the part that gets fuzzy. The city that I had an apartment in has a local tax associated with it. It’s not a large amount, but it is an amount nonetheless. When I filed my taxes for the 2018 tax year, my dad (who is a CPA and conveniently does all of our family’s taxes) asked me what I wanted to put my primary residence as. I told him my parent’s address (his address lol) as my address because, as I mentioned before, that was what I considered to be my primary address. I filed my taxes and that was that.

One of the automatic disqualifiers for the agency I’m applying to is failing to file/pay taxes. At first, I had no concern regarding my taxes because, as I said, I thought everything was in order. But after thinking about my situation, I realized that I think my taxes for the 2018 tax year were filed wrong. I believe I should have put my apartment address as my primary residence for that tax year, since, as I mentioned before, there is a local tax associated with the city I had that apartment in during 2018. I don’t think I paid the proper amount of taxes. I am going to amend my taxes for the 2018 year, as well as make sure I file my taxes correctly for this year, and pay whatever I need to pay.

But now I’m concerned that the agency I’m applying for is going to view this as a failure to file/pay taxes and automatically DQ me. After going through everything I’ve gone through with this application so far, it would be heartbreaking if that turned out to be the case, but I figure it’s better to face it head on rather than try to sweep it under the rug.

Anyway, what do you guys think about this? I appreciate all your comments/thoughts/advice. And I’ve certainly learned a lesson from this.

Making a mistake and paying the wrong amount is not the same as failing to file, or failing to pay what you know (or think) you owe. People make mistakes in good faith all the time when completing their taxes and often have to file amended returns. This is not what the question is asking.

For the most part, YOU get to decide where you live.

The issue here is federal, state and local taxes. Your residence matters little for your federal taxes. If both residences and your work are in the same state, there is little likelihood that your state taxes are an issue. The local taxes may or may not be. I’m going to assume that all three are in the same state for this answer, you can clarify if you like.

Local wages apply usually only if you live in a given location but can also apply if you only work there (for example, Philadelphia). You should find out what the requirements are for the local where your apartment was . It it usually that you are there 181 or more days per year. However, they would be hard pressed to prove that you were there for any particular number of days.

I suspect that your father can tell you the ramifications of the varying laws. I doubt that there is ever going to be a problem but if you go for a poly it needs to be clear in your head.

Sorry for my very delayed response here, Ed. I appreciate your comment - thank you. This makes me feel a little better about the situation.

For clarity, you are correct - all three are in the same state, specifically New York state. I have also already filed my amended returns and paid the difference, so I’m at least happy that’s out of the way now.

One follow-up question, if I may: I reviewed the SF86 just for my own curiosity and question 26c asks if you have ever failed to file or pay any taxes. My thoughts are I should probably answer “yes” to that question that explain the situation, correct? I don’t want to overthink and/or overanalyze this too much but I also suspect that it would look far worse if I answer “no” to the question, then have to explain it should it come up, which I assume it will.

I would answer, no . . . Of course, I wouldn’t have gone back and filed the local return for 2018 without being prompted to by the locality and even then I would have fought it. The fact that you leased an apartment doesn’t seem relevant if you spent much less than half the year there.

Your father should be familiar with the local tax laws and I doubt that he would allowed you to file a return that was less than legal.

But, you can three people at the IRS with the same question and get three different answers. That’s one of the things that keeps the CPAs in business.