Budgets Are Sexy (2026)

Saving money on budgets are sexy does not have to be complicated. We rounded up the essentials so you can spend less and skip the guesswork.

Key Takeaways

• (Guest Post by fellow reader Grant) Six months ago the tax man came looking for $7,000 and change and this week he left, empty-handed.
• It’s a good one, but one that gives a valuable lesson when dealing with state governments and requests for money from tax returns long ago.
• In July I received a letter from the state of Alabama, a state in which I once lived, stating that through an audit they’d discovered I hadn...

(Guest Post by fellow reader Grant)

Six months ago the tax man came looking for $7,000 and change and this week he left, empty-handed. What’s the story? It’s a good one, but one that gives a valuable lesson when dealing with state governments and requests for money from tax returns long ago.

In July I received a letter from the state of Alabama, a state in which I once lived, stating that through an audit they’d discovered I hadn’t paid income taxes for 2005 and 2006. My bill with penalties and interest? More than $7,000.

Shock, anger, sadness and dread washed over me. Where does one magically come up with $7,000 as a newlywed, fresh from a honeymoon and having already paid Uncle Sam $1,900 the year before?

A Little Background

A little background on this story. After graduating college in 2004, I took a job working as an independent contractor for a sports website. I was based in Mississippi. I am originally from Alabama, but over the course of school I established residency in Mississippi by signing leases, registering a car, getting a driver’s license etc. Legally I was no longer a resident of Alabama.

When I started the job as an independent contractor working for a subscription-based website out of Nashville, I became a subsidiary of my father’s small business based in Alabama. (See where this is going?) This allowed my revenue payments to flow through his company where expenses and taxes where handled for me and I was free to run my business. Every year my tax forms were prepared, I signed them and off they went to Uncle Sam and the state of Mississippi, where I lived, worked and earned income.

The Burden of Proof

Fast forward to July when that $7,000 request came through. I called my father and my accountant and asked what’s up. A few days worth of checking turned up that, yes, I did in fact pay taxes to Mississippi those two years. I replied to the initial letter stating as much and say that there must be some sort of mix up because the business was based in Alabama, but I earned income in Mississippi. We’re cool, right? No dice.

The reply came (citing law) that until I could prove that I was resident of Mississippi , supplying leases, car registrations, drivers licenses, tax forms etc. , I was on the hook for the $7,000, because in Alabama’s eyes I was still a resident of that state and no matter where the money was earned, Alabama wanted its cut.

Finding all that stuff would be an simple task had I not moved from Mississippi to Texas back to Alabama and then to Illinois in the four years since.

The Hunt Begins

So off I went tracking down old landlords, drivers records, car tags (found the physical one in a box!) and tax statements. This was no small task as pretty much everything you send to the state had to be notarized and sent certified mail. The state doesn’t take checks, it all has to be money orders for payment. So there’s waiting in line here and there, added payments for mailings, countless $1 bills for notary public stamps. All told I spent probably four hours on the phone and about $90 in money orders, notaries and certified return receipt mail. Finding one of my landlords involved searching archive.org of a tiny newspaper website for the original classified listing (using the term “smell the roses”) for the house I rented in Mississippi, and hence my landlord’s phone number.

Finally I got everything (save the tax forms, CRUCIAL not to have at the time, but I was on a deadline) packaged them all up with a detailed explanation of each and sent them back to the state of Alabama.

I heard nothing for quite some time and had, for the most part, forgotten about it. Until September when a “Notice of Final Assessment” came for the 2006 tax year. The state of Alabama says that assessment has been made and I owe $4,000. There is NO mention of 2005, so I can only assume that a clerical error caused all my proof to be applied to 2005, but not 2006.

So AGAIN I package everything up, including all previous correspondence, and ship it off the the Administrative Law Division with another detailed explanation of everything. And I wait. Some minor correspondence comes in letting me know that materials have been received and to sit back and wait.

Then the silver bullet comes through from Mississippi in the form of my 2005 and 2006 tax returns with payment amounts similar to what Alabama was looking for in those tax years. Bingo. I write a letter requesting that the documents be added to my file. I received a letter last week confirming the addition to my file, and that a request to delay judgement has been granted until my file can be reviewed.

Then today, VICTORY! The assessment is voided, the journey is over.

The Moral of The Story

The moral of the story is not to give up if you know you’re right. Once I got confirmation from my accountant that I was in the right, I set out to prove it. Simply put, the assessment of taxes was invalid. I didn’t have to find a loophole or get off on a technicality. I did, however, bear the burden of proof.

If you find yourself in a similar situation, I suggest you do the following things:

1. Document EVERYTHING. Send certified/return receipt letters with every piece of correspondence.
2. Respond immediately. Even if you aren’t sure where to go, respond in some form to open a dialogue. My first letter pretty much said (paraphrased) “No way Alabama! Not true!” That at least got the wheels going where I knew what I had to do to void the assessment.
3. Hold on to key documents, even if in digital form. Not on purpose, but in recent years I’ve started scanning and saving all key documents to PDFs. These are backed up remotely and locally and kept in a fireproof safe. Five years ago I never would have thought I would have needed the lease to my first apartment out of college. Five years from now if someone tries to tell me I didn’t live in Illinois in 2010, I’ll have leases, car titles, registrations and drivers licenses to prove it.
4. Never quit. There were at least two points where I thought “There is no way I will win this, I just need to set up a payment plan.” Now all that time in line at the post office, on the phone with the FINE PEOPLE of the State Government of Mississippi, and writing out meticulous letters explaining my position was 100% worth it! My assessment is voided, and I have the letter in my hand (and safe) to prove it.

, , , , , Guest post by Grant - a fellow reader of Budgets Are Sexy who is revelling in all his glory!

(Photo by alancleaver_2000)

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Final Thoughts

The bottom line: a little research on budgets are sexy goes a long way. Compare your options, watch for seasonal offers, and never pay full price when a better deal is one click away.

Originally published at budgetsaresexy.com.