TxH1B - please respond

[sha]

Hi, I am in big dilemma for my GC. please read my story -

- I got approved EB3 labor with PD of april 01 in April 2006 and my company filed I-140 which got approved in 10 days (premium processing). after that I filed I-485 and EAD/AP in august 07 flood and got EAD/Ap approved. However I haven't use them and still working on H1. My major issue is -

- When I filed I-140/485, I was working in PA state and my address in all these applications were from PA. However my residance address with my employer is TX and so employer did not deduct any state tax and I filed federal ta only.
- In Jan 07, I moved to CA on different project and I updated my address by AR11 but still my employer is not deducting my state tax and W2 is being issued to TX address only. SO I filed 3 years tax of TX (2006,2007 and 2008).

What could be the effect for this in my GC process? as my address in AR11 is changing contunously (3 times in CA and 1 time in PA states).
Shall I keep my address from Tx in AR11? What resisidancy will I get in case of I485 approval? Please advise..

[txh1b]

Your employer is doing illegal things to start with. You need to pay tax based on your residency state and not based on address of the employer or on their records. By doing so, employer might have avoided paying taxes to the state that they are supposed to as per the law. ICE has been cutting down on such employers off late.

To clear this mess, this is what you need to do.

File and pay back taxes to PA for the years that you were living there and residing in the state. There might be some penalty but it is worth it as you may be asked for anything during your GC.

Pay taxes to California if you are a resident. If you have lived part year there, pay NR taxes in Calif and pay the rest of it in PA.

It is important that you pay state taxes to the state and not be involved in any sort of tax evasion schemes employed by these fraudulent employers whose motive is nothing but saving a few pennies at the cost of others.

Remember, tax crimes do not have a statute of limitation and can be prosecuted at any time when uncovered.

[sha]

TxH1B - please respond

Thanks for your response. It would be very big money for me to pay back taxes for PA and CA.
What is my state of residance? where I have temporary project or where I am showing my permanent residence (TX). What if I change my address to TX through AR11 now?
Is there anyway I can save this huge money? it costs me arnd $29K. What about the employer tax for past years?

[txh1b]

There are conditions that determine your residency state as per the tax laws of the state. You filing a AR11 does not give you a state of residence in a state of your choice or change it.

I suggest only legal ways to handle situations and rest is your choice. Tax evasion is fraud and can be prosecuted any time. You will end up paying more than what you avoided and may serve jail time.

http://www.ftb.ca.gov/us-visa-and-immigration-forms/07_forms/07_1031.pdf

[sha]

TxH1B - please respond

Thanks txh1b for your suggestion.
What are the main conditions for residancy? I am very confuse about it. How will they find out that I am from other state even I am getting my W2s and Paystubs in TX. Sorry to bother you again but you know $29K is big money, that I just calculated tax @9% in CA and 7.5% in PA, not calculated penelty. How much panelty may be in this case?

[txh1b]

You need to consult a CPA. Unless you earn a huge salary, 9% in California is unusual and 7.5% in PA is definitely wrong as PA has flat rate tax of close to 3%.

Income tax rate and sales tax rate are different.

http://www.taxadmin.org/fta/rate/ind_inc.html

[sha]

Txh1b - please respond

Hi txh1b, Thanks for your valuable responses. I will consult to CPA as well. Spoke with my company but they aren't registered in CA. They said that it can be done in 2009 if I want. I am in highest slab 9.3% in CA and yes, PA is 3.2% only. Still huge money. I don't know how to handle it. Will my company be in trouble if I pay taxes now for last 3 years? What could be the impact in my GC process?
How are the chances for procecution if I am ready to pay panelties also?
Honestly, it wasn't intentional, I am honest and want to be honest for all the time. It was just lack of knowledge. I am really worried now...