Keystone Collections says I owe an absurd amount of interest and penalty's

Submitted by Superteetee t3_yj7yw5 in Pennsylvania

This has been going on for months in response to a letter I got from Keystone saying I owed local state tax. Their letter said I had paid $0, while my W-2's showed I had paid a very similar amount to what that said I owed. After going back and forth with them for months due to sending their requested documents over and over again, they've settled on a much smaller amount of $1000. Fine, lets just go with that and be done with it. The problem is that they're charging another $1000 in penalty's.

My question is, if they didn't have the correct number in the beginning, and clearly had no clue if I owed anything until sending a bunch of paperwork back and forth, how the heck can I owe 100% of the tax in additional fees? This feels dirty/illegal. Anyone been in this situation before and gotten out of it?

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Comments

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princeoinkins t1_iumevyl wrote

don't pay a dime and go to an accountant. the WORST thing you can do is just pay them to leave you alone.

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tdmopar67 t1_iunqtw2 wrote

made this mistake once. then literally had a similar issue this year and yes. accountant made all the difference. I have no idea how they could be so disorganized and it's a stressful frustrating situation. sorry you're dealing with it too

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SamShephardsMustache t1_iumbmzk wrote

Keystone are crooks. Dealt with them before. Contact the state AG, BBB, and your local representative.

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InfraredDiarrhea t1_iumcbjv wrote

I agree. These people are the worst.

Three years in a row they have magically “lost” my return and dont bother to notify me until a significant amount of fees and charges are added. Absolute scum.

I always send them my return via registered mail now so they cant claim they lost my return. No, assholes, i have proof that your greasy little hands have my return now.

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dngdzzo t1_iumg48g wrote

This is the way to do it. All tax returns, if mailed in, should be sent registered mail with return receipt.

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glberns t1_iumfebe wrote

BBB is not a government agency. They're essentially an old school Yelp.

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freedoomed t1_iumjrl2 wrote

the BBB is a scam itself. they will do nothing to help you other than let you post your review on their site.

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hachijuhachi t1_iuml8xu wrote

IDK - I've had good luck. Any time I've contacted BBB, I got a pretty rapid response from the business I was complaining about asking what they could do to remedy the situation. Granted, this most recently happened in probably like 2016, but seems like, for some companies, the BBB complain still carries a little weight.

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jaymz168 t1_iumw911 wrote

I also had luck with the BBB and a terrible ISP back around 2011. One could almost come to the conclusion that the "BBB is useless" meme is astroturfed propaganda...

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axeville t1_iunir27 wrote

BBB is the threat of a bad review but has no actual force.

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insofarincogneato t1_iuo6ftt wrote

The bbb has no real authority just because they can advocate for you. Anicdotal evidence that they helped you isn't the gotcha you think it is when so many people have the opposite experience.... It's really easy to say these experiences aren't valid when you don't take the time to know how exactly the bbb works.

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th_22 t1_iumq9zl wrote

BBB is Yelp for old people

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Naugle17 t1_iumj6kx wrote

BBB isn't an agency, it's yelp for businesses

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choptheair t1_iumodwe wrote

The BBB has zero authority for anything. They are in essence a marketing scam as well. Stick with the AG and local rep.

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festerwl t1_iumdtqu wrote

This sounds like Berkheimer here in Erie. I went through something similar when I moved townships.

In the end it was easier to stop communicating with them through the mail. I took everything they were asking for and went to the closest office. Said look this is all the paperwork, I've paid everything, and owe nothing. Person I talked to agreed and I made sure to get paperwork from them showing the account was cleared. Never heard from them again.

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heili t1_iumeuga wrote

Berkheimer, Jordan, Keystone... they're all the same. The "revamp" of the local EIT collecting seems like it was completely made for these shady companies to roll in dough.

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ButtBlock t1_iundkes wrote

Exactly. The poll tax in our county required a 3 USD fee on top of the actual 10 USD tax.

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CreeperIan02 t1_iuqa1l1 wrote

... what? Aren't those immensely illegal?

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ButtBlock t1_iuqez25 wrote

Not in PA lol. It’s not actually a poll tax, it’s just colloquially called that. It’s a flat tax that every single resident has to pay. Regardless of whether they rent or own their house or apt.

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lukewwilson t1_iur14n3 wrote

Yeah we have that in my tiny township where I live in Western PA, we call it the right to live tax.

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Bird_Brain4101112 t1_iumiwds wrote

I freaking hate Berkheimer. Every year we have a battle because they pull out some nonsense claiming I owe money from 15 years ago and no one can explain why. I’ll file then they come back and claim I never filed. Or I’ll get a final notice telling me I’m about to have wages garnished but I never got a single notice and somehow all the previous notices went to a different address but the final notice miraculously came to the right address.

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KFCConspiracy t1_iumnkz4 wrote

I had the same issue with Berkheimer. They're a bunch of crooks and I think they do it on purpose. Everyone who moves out of a county that collects with Berkheimer has that issue with them. I think they intentionally don't have a process to deal with this because rubes will pay and they get a cut.

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IWantAStorm t1_iuqolpz wrote

Berkheimer sends shit to my parents for me where I haven't lived in decades, continuing to ding my credit till I fight it again and again. It's ridiculous.

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PoeticMilk t1_iuqkd06 wrote

I had the same issue…moved from Venango County to Crawford in 2010…in 2014 I get a notice for unpaid local taxes for Oil City school district even though I no longer lived there. I call Berkheimer, they say oh our bad, just ignore it. Two years later I move to Erie and I get another notice saying I owe taxes to Waterford, even though I’ve never lived nor worked there. Not quite sure how they get such incorrect info.

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FrogWallopp t1_iumiuik wrote

Word to the wise; Keystone is using a technique called a ' jeopardy amount', trying to collect an amount they have no legal mandate for. Essentially, it works like this: Taxpayer 'X' owes an amount to a municipality. Said municipality has no facility or resources to collect this amount, so they sub-contract to keystone, or another company like it, for a percentage of the amount collected. To get you to pay attention, the firm uses an exorbitant amount ( typically 3-4x tax owed) then will either 'negotiate' it down, or if you are stupid enough to pay that figure ( most people do, they wrongly assume that it is required, that's why these firms exist) they will just take your payment, keep the ' jeopardy amount' and their % fee, and give the township the tax(after collecting a bit of interest on the money, too, of course) Bottom line is, they have a mandate to collect the tax, and a small percentage in a late fee which will vary by municipality, but NO MORE than that. READ your local laws carefully, or hire an attorney, they will immediately drop the excessive amounts. Call them out, don't pay them. Source: local CPA.

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Superteetee OP t1_iuu6ff3 wrote

OK, so we just got a letter at work today saying to garnish my wages. Now what can I do?

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Zovermind t1_iumf0h8 wrote

Contact your actual local tax collector for your township they might be able to straighten it out. It should be on your townships website or call the township office to get in contact. We got a letter saying we owed a few hundred in back taxes after we bough a house, turns out we actually didn't.

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mrboozer t1_iumi47n wrote

Why would you agree you pay money you don't owe? Their number should be exactly what is shown on your W-2.
If that is not the case, then it is a problem that you need to take to your employer because they aren't remitting it correctly when doing your payroll.
My only other guess is that you forgot to submit your local tax return. I don't think all of the information is being presented here.

As far as Keystone Collections goes, I've heard they are shitty to deal with. I've also heard that about pretty much every organization that exists solely to collect your money.

I've done payroll for numerous companies in PA.

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hobbykitjr t1_iumkney wrote

Itd be great if they notified people who moved to PA, like when you get your new drivers license...

i had nothing similar in my previous state and was surprised, thought it was a scam when it said i owed a separate tax from what i filed w/ the state.

like when was i supposed to learn about this process?

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phasechanges t1_iumu6n2 wrote

Yep...this state has the most incomprehensible set of taxes and corrupt companies set up to do nothing but collect those taxes that I've ever seen. After 20+ years living here I still have not heard a good explanation of why there are local income taxes, occupational privelege tax, earned income tax, etc - it's almost as if it's designed to maximize income to well-connected tax collectors.

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hobbykitjr t1_iumvqb8 wrote

and sometimes its like $8.... all that paperwork, admin costs to collect $8, can't be worth it.

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mrboozer t1_iuog2dr wrote

Occupational privilege got renamed/branded to Local Service Tax - Police, Fire, and Ambulance

Local income tax and earned income tax are the same thing. This is based on both where you live, and where you do your job.

As far as why we have private companies collecting taxes, I suppose you are correct. The less cynical reason would be private labor is cheaper. It is probably a combination.

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dazhuko t1_iumwq8n wrote

This is a great dream to have, but in reality, municipalities are so incompetent some times they dont know someone moved to the area until they are moving out.

Sadly it is up to you, the taxpayer, to pay even when not billed because you are supposed to just KNOW that you owe.... something.

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hobbykitjr t1_iun2vzp wrote

i didn't even know it existed! heads up from the State of PA would be nice to check this site

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IWantAStorm t1_iuqpby3 wrote

Just get a ticket for rolling through a stop sign. That should cover it.

Penalty $10

Fees? Ambulance, Fire, Safety, Roads. $145

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ace115630 t1_iup59bc wrote

I just went through this and said these exact words. Just throw in a damn pamphlet when someone gets a PA drivers license informing them of the ridiculous extra tax return that has to be filed.

This state (and country) makes it about as difficult as possible to pay taxes, especially if you’re not paying someone to take care of it. Then if you don’t calculate things correctly, it takes them years to figure it out and then they want interest and penalties for all that time.

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zlana0310 t1_iunf3yy wrote

That happened to my husband when he moved here too, unfortunately he didn't let me know he got that mail or I would have told him he needed to pay it, he also thought it was a scam. Ended up with a decent late fee...

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hobbykitjr t1_iunfntp wrote

I never got anything in the mail prior, do you get something annually?

only after it was 'late' did they mail me i had a late fee and fine etc

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zlana0310 t1_iung2ph wrote

I think he got the late fee one, not an initial notice, but I'm not sure, I didn't even find out about the entire incident until this year and it happened 3-4? Years ago. But didn't pay that initially because he thought it was a scam so there was an even bigger late fee.

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relaxed-bread t1_iumfjr0 wrote

Call a local CPA, give them a copy of the notice, the W2 and any other correspondence. They’ll be able to resolve this.

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Batman413 t1_iumg7v0 wrote

Keystone Collections are the scum of the each here in PA. Fight them tooth and nail. they tried to extract money out of me that I already Paid for taxes that were like five years old. Company is nothing but a bunch of scumbags

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Doug4Prison t1_iumgetg wrote

I had to deal with these pricks a few years back before covid. They told me I owed a bunch and I faxed them my return and W2. I contacted HR at my work about it and they worked it out with them. Might be worth it to ask your works HR about this if you actually paid it already.

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mbz321 t1_iun7xlc wrote

I don't understand why we even have to file this local tax nonsense. Apparently us and Ohio are the only states where this is a thing.

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insofarincogneato t1_iuo7o9h wrote

Thanks for that info, I had no idea. I lived here my whole life, I wouldn't know what to do with myself in a different state lol

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trying-to-be-kind t1_iun9sb4 wrote

I don't know all the specific details of your case, so I can only speak in general terms.

Keystone tried this crap with me several years ago, claiming I owed a small amount of back taxes from several years' prior - just far enough back that finding the paperwork proving they're wrong would be a pain, but for just small enough of an amount that the avg. person would cough it up to be done with it. This is a money-making ploy. I'm not sure if that's what's going on in your case, but it wouldn't surprise me.

I attempted to call their office - all my calls went to voicemail. I attempted to find a physical office, but the only info I found (at that time) was a PO Box (you can now find a local tax office here). I did notice on the back of the bill they sent me was a blurb about my rights under Fair Debt Collections (or some such blurb - check if it says something along those lines on any correspondence they sent you, because it's legally required). So I sent them a certified letter basically quoting their own legaleze, requesting they prove I owed the money. This site has some good sample letters you might be able to use. Include a request not only to prove the correct amount you owe, but also request an itemized bill of all the penalties they claim you owe and request how those fees are calculated. Per the 2004 PA Act 192: "Costs related to the collection of unpaid per capita, occupation or occupational privilege taxes may only be assessed, levied and collected for five years from the last day of the calendar year in which the tax was due."

In my case, Keystone figured I wasn't worth the effort after receiving that letter. I did get some small satisfaction knowing they probably paid more money in postage & to have someone type up that bill than the measly amount they claimed I owed.

If you still receive threatening letters/bills from Keystone, then you may have to hire a CPA or someone to deal with it. But do not pay that bill until THEY prove you owe the money.

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Padugan t1_iuo6qqh wrote

Keystone Collections has no information from the state. They have no idea if you paid or not all they do is collect. I have no idea why they try this scam with people. I had my accountant threaten legal action to get them to stop. I don't understand why a private company is collecting state money. This should be handled by Harrisburg so there is some accountability.

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friedchickenwaffles t1_iuqv1kq wrote

I called them, heard the bullshit, and have basically ignored it since. Telling me I owe to the municipality I moved into in 2020 for FY 18/19. I told them they're wrong, you work for the gov, you figure it out. They said they can't actually submit this to collections or your credit report. I guess I'll find out some day.

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Bstokes4102 t1_iumf7dd wrote

Contact your local state rep asap, this is something they can help you look into.

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angelinafuckingmarie t1_iumi4p0 wrote

I had this happen when I legitimately filled out a form wrong trying to file my own taxes. A local accountant was kind enough to help me fix it and send a letter to them stating what they are doing is illegal and basically the equivalent of loan sharking. It was funny how once I paid what I actually owed with the correct penalty amount and they got the letter they never bothered me again. It wasn’t Keystone I should add, it was a local tax for the area I was living in at the time.

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EmiliusReturns t1_iumqbhp wrote

I didn’t even know Keystone was real for the first 4 years I lived in PA and I tossed them. Never had them come after me those years.

I never got a letter from them last year at tax time, I only got a letter months later saying I owed $2 (yes, 2 dollars) in local tax and had to pay a $25 penalty. Well, you people never sent me the forms to pay the local tax in the first place! Fuck Keystone.

If my Borough really wants that $2 that badly I’ll happily walk down the street to their office and hand it to them. Sheesh.

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dazhuko t1_iumuqcp wrote

It sucks, but you are required to pay the tax even if you are not billed for it. If it seems strange you never received any bills, it is on you to find out if you owe anything

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insofarincogneato t1_iuo77ep wrote

Now that you mention it, I don't believe I've gotten anything in the mail from them for the last few years since I started doing my local taxes online. The only reason I ever got anything was when I was late with them once. (Or maybe I wasn't... Who knows at this point). My parents who do taxes the old fashioned way gets a form every year though.

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Chuck1705 t1_iumgc41 wrote

Don't take legal advice from a social media site...

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sueder78 t1_iummzgl wrote

Do not pay the agency, get with your local tax collector and pay them direct.

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boringreddituserid t1_iumv0f7 wrote

Many local tax collectors don’t handle income tax.

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dazhuko t1_iumvr9l wrote

This is correct, Keystone is most likely OP's EIT collector. They only know what the state and taxpayers tell them. Which can be limited or wrong.

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McC14 t1_iumxlk1 wrote

Did you move during the tax year they're asking about? they tried pulling this crap on me for my 2021 taxes and I had to send them documents showing where I lived during that time.

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Whutever-its-2009 t1_iun5gwb wrote

Keystone is chasing me too for school taxes from a a county where I have only ever rented property. I don't understand why I owe school taxes as a renter. I have never owned property in my life.

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Bazurkmazurk t1_iuojxdf wrote

Keystone collections is all screwed up. 2 years in a row I have gotten unpaid earned income tax bills from 4 years ago. I worked in Philadelphia so I am exempt from paying it. I still have to go through the process of accessing my old w2 and sending it to them to open a case and wait months for it to get resolved

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billstrash t1_iumq6qa wrote

The only thing to be careful about is if your company used a shitty payroll service the possiblity is that THEY never paid Berkheimer o/b/o the state or municipality. Happened to a buddy of mine and it was a nightmare because technically you still owe the taxes (they got it cleared up after the owner of the payroll company served some time, lol).

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CQU617 t1_iunu35x wrote

Same issue with Berkheimer. Everything was paid and they are still dunning me.

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tacticaltaxman t1_iuon9ri wrote

You need a CPA. I just happen to know a very good one ☝️

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vibes86 t1_iup9sgf wrote

Talk to your payroll departments and get proof that you paid what you were supposed to pay. Have your local return reviewed by a tax professional. Have them help you send the proof that you paid. I had to do this with a staff member with Jordan Tax once. Had W2s plus the evidence from the payroll company that the payment was sent to the taxing agency. I think they finally gave up after that.

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ElenorWoods t1_iupb7ct wrote

Write a letter to the state and request for an abatement of penalties and interest. State that you normally pay on time and that the late paid tax was an accident. Accountant here, it usually works!

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BurghPuppies t1_iupgxqr wrote

As a people manager, I’ve run into the situation once or twice where they taxes WERE begin paid, but they were going to the wrong municipality. Employees had to file for a refund from the wrong municipality, and then file and pay in the correct location. It may explain why they say they got $0, but your W-2s say you paid.

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blazinbevcrusher t1_iurbplm wrote

Keystone Collections is awful and absolutely do try to scam people. They tried to say I owed $900 in taxes and fees for two years when I did not live in the county they said I did. I called into the local tax office of that county and the woman there said they send out these forms and hope people don't fight them and just pay. First, I sent them my W-2s and they said they needed more information. Then, I sent them two years of bank statements and haven't heard a peep since. Don't just pay it, get an accountant.

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Donotaskmedontellme t1_iumi5gb wrote

Every year I do my state taxes and I get like $17 back, max. That's not even enough for a bag of coffee anymore.

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mrboozer t1_iumisqc wrote

There aren't nearly as many deductions and credits for state returns, plus the withholding rate is generally the same for everyone as their is a flat income tax rate in PA.

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