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Worked in another state, lived in Massachusetts. Had a tax professional file taxes from 2000-present. Found out yesterday that I didn't file MA taxes in 2004, and MA now wants that tax with interest and penalties, although I filed the other state's taxes.

What do you mean "found out yesterday"? You found out in 2005 when, supposedly, your accountant who had been doing things correctly in 2000-2003 didn't do a 2004 MA return. You weren't even a teensy bit curious as to why?

The good news here is that you probably don't owe MA much for 2004. Yes, I know they sent you an outrageous bill, but what with budget cutbacks they've had to fire their psychics and just go with what they're told. In this case IRS has told them about your income and residency, but nobody has told them this income was also taxed by another state. That's your job.

Then in 2006, I changed jobs, and this job was in a nonprofit, but I received a 1099. I was told I didn't have to pay taxes, so I didn't even file taxes in MA or federal.

I find that for some reason passive voice turns up at the most interesting times. Who told you that, the tooth fairy? Did you read the 1099, the part where they tell you this income is being reported to the IRS? Did you question this fount of wisdom who was telling you what you wanted to hear?

Then last year, the tax status changed (and no one told me), and I am considered a vendor of services for 2007.

Nothing changed. That's exactly the same status you had in 2006.

I'm confused, not sure how to file my 2007 taxes, can't afford the 2007 or the 2004 tax stuff.

Don't forget 2006.

Does anyone have a suggestion on who I can go to for tax advice locally that won't charge me an arm and a leg? I'm not savvy enough about the tax stuff to deal with the MA Department of Revenue, and I'm afraid they will run me over. I am also interested in finding out if my tax accountant has any liability here since I followed her advice. Suggestions? Please? Desperate....

In the eyes of the taxing authorities you bear full responsibility. "My accountant ate my homework" doesn't work. Your engagement letter with the accountant should have addressed errors and omissions. I would start with a "What's up?" to her.

The last time I looked you can't turn around in MA without bumping into a law school, and many of them do low-income tax clinics. Also check out the newspapers, where such efforts are usually publicized. You have some problems to address, but yours is far from the worst mess I've ever seen. So calm down and get cracking. All will be well eventually, and you'll have learned some valuable lessons.

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