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Consumers : IRS Won’t Budge, So It’s Your Move

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Question: I’ve just received my degree in business administration and, as a result of a campus interview a few months ago, have been offered what seems like a very promising job in Chicago.

The trouble is that there was no mention by the company hiring me that it would pay my moving expenses from Southern California to Chicago. While I don’t have a lot to move, I don’t have any money either and am going to have to borrow from my folks to make the move.

I know that there’s some sort of arrangement under which a person can deduct his moving expenses if he’s being relocated--or has gotten a new job--to another city and have inquired as to whether it applies to me. Most of the answers I get say no, just being a college graduate does not qualify me, because I don’t really have the job yet, and so the Internal Revenue Service considers me a transient or an “independent contractor” or something like that. I still think I’m eligible, though. What do you think?--W.W.

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Answer: I think your new employer showed rare good judgment in picking you. Anyone as sensitive as you to the fine points of the Internal Revenue Code--even before he or she is officially on the job--is a pearl beyond price in the corporate world.

Yes, according to Carol Shapiro, a public affairs spokesperson here for the IRS, your understanding of the moving deductibility for a college graduate is right on target. It also applies to someone returning to full-time work after a spell of unemployment, or to part-time employment, or to someone who--for one reason or another--has simply not been on anyone’s payroll for a while.

That “independent contractor” confusion has to do with people like doctors, lawyers and so forth--predominantly self-employed--who are simply moving to where they think the grass is greener. They, sure enough, can’t deduct their moving expenses.

In literally all respects, then, you’ve got the same deductibilities that the established worker has in taking a new job, or who is being relocated, but is responsible for his own move. In other words, you can deduct the full cost of moving your household goods--and in traveling to the new job site. You can also deduct up to $3,000 in such indirect costs as making an advance house-hunting trip, in disposing of your old home (probably not applicable in your case) and in temporary living expenses while you’re getting settled.

The only proviso, the IRS’ Shapiro says, is that the move has to see you working full time at least 39 weeks of the first year at the new job site. But even here it doesn’t have to be continuous employment, nor with the company that hired you in the first place. You just have to stay settled in the general area for at least 39 weeks of full-time work.

Good thinking. You’ve got a promising future.

Q: I know that a sales tax frequently is payable in the states in which a product is made or sold, but every time I see a Franklin Mint magazine advertisement--for a miniature car, a figurine or whatever--the information about price is always accompanied by the instruction: “plus my state sales tax.”

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Am I being overly suspicious in thinking it highly unlikely that the people at Franklin Mint actually turn over the money thus collected to the states from which the orders are received?--D.L.H.

A: My, you are cynical, aren’t you?

While he obviously can’t speak for how the other 49 states do it, Jim Caldwell, administrator for the out-of-state district for the California Board of Equalization, assures us that California does, indeed, get its pound of flesh out of vendors operating in the state from an out-of-state base.

“Currently, there are about 20,000 companies and individuals who keep their accounts outside the state and are registered to collect the California sales tax,” Caldwell says. “And about 10,000 of these don’t have any location at all within the state--either operating entirely by mail or, possibly, through one or two sales reps located in the state.”

And, under Caldwell’s direction, the state maintains a staff of auditors in New York City (25 auditors there alone), Chicago and Houston. Another 25 auditors operate out of Caldwell’s Sacramento office and cover the Western states just as the New York staff covers the Eastern Seaboard--including Pennsylvania, where theFranklin Mint is located.

Accounts for all 20,000 vendors are audited at least every three years--just as they are in California itself.

And the Franklin Mint, you will be relieved to hear, has been registered--and is in good standing--with California since about 1970.

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Trust us: The tax collectors leave nothing to a vendor’s good intentions.

Campbell cannot answer mail personally but will respond in this column to consumer questions of general interest. Write to Consumer VIEWS, You section, The Times, Times Mirror Square, Los Angeles 90053.

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