When to declare MT residency in transition from owning a home in another state and in MT?

[Wildabeest]

How to fool the system should be its own thread. I'm not sure how that works exactly. Seems like with mobile banking, anyone could set up "residency" in zero tax state if the only requirement was to get SS deposits in your account there. I would guess the IRS has figured that one out.

IRS doesn’t care because we’re talking state income taxes here. And, yes, lots of people figure out how to game the system to their advantage. Some are legit loopholes, some illegal misrepresentation or outright fraud. I’ve been building fraud detection systems for the past 25 years. Tax agencies are a big chunk of my customer base. I’ve seen some pretty creative schemes in my day, and some really stupid stuff that I can’t believe people thought they’d get away with.

 

[AvidIndoorsman]

IRS doesn’t care because we’re talking state income taxes here. And, yes, lots of people figure out how to game the system to their advantage. Some are legit loopholes, some illegal misrepresentation or outright fraud. I’ve been building fraud detection systems for the past 25 years. Tax agencies are a big chunk of my customer base. I’ve seen some pretty creative schemes in my day, and some really stupid stuff that I can’t believe people thought they’d get away with.

I’d add, some states are pretty relentless in pursuing folks. CO has always been a huge PITA to deal whenever we have moved out of the state.

 

[SAJ-99]

I’d add, some states are pretty relentless in pursuing folks. CO has always been a huge PITA to deal whenever we have moved out of the state.

How many states have a picture of you in the revenue office?

 

[AvidIndoorsman]

How many states have a picture of you in the revenue office?

I did school the CO office hard in person and got a nifty we won’t ask you again letter.

 

[MLC]

I don’t know about Montana but some states, like Minnesota, are very aggressive about this issue. In fact they (Minnesota) have enforcement staff whose entire job is to investigate these exact issues, typically between North & South Dakota and Minnesota. I suppose because of the considerable disparity in taxes between the states.

When I retired in North Dakota we moved 45 miles east to our lake home in Minnesota but kept an apartment in Fargo, ND, because my wife continued to work there. I didn’t buy Minnesota vehicle tags for my pickup because I had just purchased new North Dakota tags and considered ourselves North Dakota residents as we still had a residence there. After about four months I received a letter one day from the Minnesota Bureau of Criminal Investigation. They informed me I was had not registered my pickup in Minnesota within the 30 days required by law. Out of curiosity I called and asked them how they knew I was living at the lake more than Fargo. The guy said, “because you change the oil in your pickup in Detroit Lakes” I asked how he knew that. He said, “Car Fax”. He even knew the shop where I had the pickup serviced.

I had planned to eventually change our residency so I didn’t argue. But it illustrated how aggressive some states are about it.

 

[LopeHunter]

I’d add, some states are pretty relentless in pursuing folks. CO has always been a huge PITA to deal whenever we have moved out of the state.

Choose your last U.S. state of residency wisely if you are moving overseas. You can sell everything you have in America thinking have severed ties with your last state of residency and you will never owe that state or any other state income taxes while you live overseas for years as a U.S. citizen. You would think wrong.

 

[AlaskaHunter]

If you declare MT residency Jan 24 your income will be taxable in MT even if your address is still AK. Once you're a resident of a state virtually every state taxes your "worldwide income". Does matter where the bank accounts are. Whether they find out about it is a different matter. Most states have information sharing between departments where things get matched up eventually.

Yes I assumed whatever income that is declared on our federal tax return is also taxable income once we declare MT residency in Jan 2024.

 

[Wildabeest]

If you declare MT residency Jan 24 your income will be taxable in MT even if your address is still AK. Once you're a resident of a state virtually every state taxes your "worldwide income". Does matter where the bank accounts are. Whether they find out about it is a different matter. Most states have information sharing between departments where things get matched up eventually.

There’s a law called FATCA (Foreign Account Tax Compliance Act) that attempts to force foreign banks to report assets and information on foreign accounts held by US citizens. Since US law doesn’t really have dominion over foreign companies, the way they force compliance is to say that any bank that doesn’t comply will be forbidden from interacting with the US Wire Transfer system (FedWire). Without that, those banks will not be able to do correspondent business with US banks, which would have significant negative consequences if they do any international business. So, yeah, big brother is watching - even outside the US.

 

[AlaskaHunter]

There’s a law called FATCA (Foreign Account Tax Compliance Act) that attempts to force foreign banks to report assets and information on foreign accounts held by US citizens. Since US law doesn’t really have dominion over foreign companies, the way they force compliance is to say that any bank that doesn’t comply will be forbidden from interacting with the US Wire Transfer system (FedWire). Without that, those banks will not be able to do correspondent business with US banks, which would have significant negative consequences if they do any international business. So, yeah, big brother is watching - even outside the US.

Years ago we won a small claims court suit against a contractor who did not complete a job.
The court allowed a "bank sweep" of banks inside the state as part of the judgement.
So in that case, having a bank account outside the state might avoid the "bank sweep"

The court also allowed us to file for the contractor's permanent fund dividend check and put a lien on his property.

 

[jpcoll01]

Out of curiosity I called and asked them how they knew I was living at the lake more than Fargo. The guy said, “because you change the oil in your pickup in Detroit Lakes” I asked how he knew that. He said, “Car Fax”. He even knew the shop where I had the pickup serviced.

This is scary...feels like a 4th amendment violation

 

[Wildabeest]

This is scary...feels like a 4th amendment violation

For the most part government can use publicly available information for any purpose they want. You’d be amazed at how much data there is out there on you, and there are companies whose entire business is collecting, packaging and reselling “your” information. It’s actually not “yours” though, because you sign away most of your rights to it when you click the little box accepting a vendor or website’s “privacy policy”. That term cracks me up, because if you actually read the privacy policy, it’s mainly focused on all the things you’re allowing them to do with your information.

Europe has much more stringent regulations called GDPR on how personal data can be used and shared.