The banks hand your money to the government without waiting for a court order

Interesting:

I moved from Massachusetts to Illinois in 2003, and I opened my Chase account there in 2005. I also hired a CPA and dutifully paid all of my state and local tax, in full, every year including 2007. I moved further west to California in 2008, so imagine my shock when in January of last year, I got a letter from the MA Department of Revenue claiming that I owed them a jaw-dropping sum for 2007. Again, I hadn’t lived there or worked there since 2003, but I did own part of a business that was headquartered in MA, and the state was using this fact to harass me for income tax money. How much money? At least 10X what I’d actually owe them if I really did owe them income tax for 2007; or, to put it another way, roughly 10X what I paid Illinois in 2007 on the advice of my Illinois CPA.

I didn’t just let this nasty MA tax claim ride, thinking it would go away. I put my California CPA to work on it, I hired a tax attorney in MA, and I even hired a CPA malpractice attorney to go after my Illinois CPA on the slim chance that Massachusetts is actually right and I do owe them something. I filed appeals, submitted papers, and generally stayed on top of it. So I wasn’t overly alarmed when a few weeks ago, the MA Dept. of Revenue sent me a notice that they were filing a tax lien against me with the MA Secretary of State’s office. But I didn’t freak out, because hey, this is part of an ongoing dispute where they’re clearly way out of line, and I have some very good people working with me on this… and besides, I don’t own any property in MA, so what are they going to do?

And then, without even sending me a copy of any kind of court order or document, they’ve suddenly frozen and are on the verge of confiscating all of the funds in my out-of-state bank account.

After talking to Chase, my next call was to the MA tax attorney that I’d hired to fight with MA over their insane tax bill.

“I’ve dealt with this once before, with Bank of America. And the guy was in California, just like you. Chase Manhattan is not supposed to freeze an out-of-state account like this, and MA knows it. But MA does this because they know they can get away with it.”

I then headed down to my local Chase branch, and where I talked to their legal department and got them to confirm that this is their policy. I also played the journalist card and got them to put me in touch with someone from their executive office who could speak on the record.

“The management stands behind the decision to freeze your account,” she said. She argued that because Chase has a minor presence in MA (a few non-branch offices), they’re subject to MA jurisdiction and have to comply with the order to freeze my account, regardless of where the account was opened or is currently located. She also said that I had agreed to all of this madness when signing up for the account, as part of Chase’s terms of service.