Client Success Story: Hector Ayala's Taxing Situation Remedied

FIN_Hector_Ayala_RGB_1_640x295Hector Ayala is a friendly, dignified 82-year-old Mission resident who likes the feel of a paintbrush in his hand. Now, we’re not talking slapping a new coat of paint on houses: Hector has been painting San Francisco street scenes for years in his rental space on San Carlos Street.

All was fine until 2007, when a neighbor mistakenly convinced Hector, via scare tactics, that he needed to file for a city business license. This confusion of avocation and vocation proceeded to cause the artist years of issues—issues that were not resolved until last week.

These harrowing problems began in 2011 when the Franchise Tax Board (FTB), California’s tax bureau, saw that Hector had taken out that business license with the City and County of San Francisco. Seems FTP wanted tax money–$3,144 to be exact. This was money the senior on a tight budget did not have, plus he was not making money from a business anyway. While he was a documented resident, Hector had never become a citizen, meaning he was not eligible for Social Security. His sole income was from Cash Assistance Program for Immigrants (CAPI), which was being directly deposited into a checking account at his local bank.

Imagine Hector’s shock when the balance in his account showed as zero one day.

Turns out FTB’s lien translated to Hector’s balance being garnished, with about $1,500 withdrawn. Plus, the remainder of the $3,144 was still deemed due by the state agency.

At a loss of what to do, Hector came to Plaza Adelante and started receiving one-on-one coaching from Teresa Garcia. The MEDA coach was initially confused by Hector’s case. “It took me a while to fit all of the pieces together,” explains Garcia.

The financial expert painstakingly sifted through years of paperwork and ultimately realized that Hector was never making a living as an artist. When she asked Hector if he ever made enough money as a painter to pay his living expenses each month, the answer was a resounding, “No.”

Garcia knew that there should never have been a business license in the first place. She diligently filed paperwork for Hector, wading through city and state bureaucracies in the process.

The financial coach also enlisted the aid of Max Moy-Borgen, tax program manager at MEDA. Moy-Borgen knew that the way to expedite this issue being cleared up was to actually file business taxes for 2014 and three back years, with a Schedule C to show no annual income from a business.

The result? Hector just walked in with a check for $1,525 from FTB!

The case has been cleared with state agencies, and Garcia also made sure that the San Francisco business license has been closed out.

Sums up a relieved Hector, “I am grateful to MEDA in a big way. The MEDA staff is very important to me, especially Teresa and Max. Without the help and professional assistance that I found at MEDA, I simply would have been very sad, with no way of recuperating my money.”



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