WA DOR Audit regarding B&O Double Taxation
I am writing you with concerns regarding the audit that I have been subject to at the WA Department of Revenue (DOR). The outcome of my B&O Tax audit has the potential to dramatically impact other Washington service providers in various professional fields including; physicians, attorneys, chiropractors, accountants and others.
I worked with an attorney to set up a business (Helpenstell, MD, PS) in 2016 and several of my partners did the same thing. There have been some tax advantages, but I never utilized them fully. I closed my business in 2021. I received a phone call from DOR Collections in February 2022, saying I was delinquent on paying B&O taxes for the past 5 years and that I owed $91,279.22 in taxes and interest, plus an additional $53,000 in penalties. I was never notified by email, mail or phone prior to a call from the collections department. They had posted it on my SAW account at DOR, but I already closed my business and had no access to that account.
I have worked with 2 separate CPA firms since 2016 and both firms have determined I do not owe any B&O taxes since the only money that came through my business was pass through income from my work at Olympia Orthopaedic Associates (OOA), and OOA had already paid the B&O taxes on my behalf prior to sending me my distribution. In essence this is double taxation. WA DOR told me they disagree and I needed to pay immediately. My CPA suggested I pay the $91,279.22 while we sort this out , but told me not to pay the penalty. After doing that I spoke with my attorney who adamantly said I should not pay anything and I do not owe any B&O tax. None of my partners have had to pay this tax even though several have been audited by DOR with clear results stating no B&O taxes are owed.
I am still fighting this at DOR with the help of an attorney. The outcome of this audit could be devastating for everyone who has their own business and works for a larger business.
Sincerely,
Tom Helpenstell
April 25, 2023
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