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September 16, 2019

Moving to escape taxes? Make it a clean break

  • Wealthy people who move away from high-tax states are virtually certain to face a residency audit.
  • By LIZ WESTON
    NerdWallet

    Breaking up can be hard to do if the other party doesn't want to let you go. People who move out of high-tax states may learn this the hard way — through a residency audit.

    States such as New York, California and Illinois use the audits to claim that your recent interstate move was just a tax dodge and that you still owe their state income taxes. Proving you've actually moved and plan to make the new place your permanent home — yes, the burden of proof is on you in a residency audit — often requires far more than flashing your new driver's license or spending a certain number of days outside the old state.


     
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