The Wisconsin Dept of Rev says that I didn't file in 2002 or 2005. So I had to pull all the paperwork together and file again. Both the years they owed me like $200 each year. Now they are saying that I owe them for penalties and interest because it's 2010 and they just now got my paperwork. Can they really do this? How is it my fault they lost my paperwork. CLEARLY I would have submitted my taxes those year... especially since I was due back money. What are my legal options? Anyone know?

So you merely have to prove that you filed. Do you have your original copies of your filing ( perhaps attached with your Federal filings) If you can't prove they were done previously.

When you did not get your refund, ( since you filed) do you have the copies of letters you sent asking about your refund

First, as you probably know it's too late to file for 2002 or 2005 and claim a refund, so the $200 for each of those years is gone.

Second, it seems that WI does indeed apply a penalty of up to 25% of your total tax for late filing - see: Individual Income Tax - Late-Filed Return Frequently Asked Questions - Wisconsin Department of Revenue

My advice is to send a letter together with copies of your original returns for 2002 and 2005 - showing your or signature and date - and explain that these copies show that you filed on time. It may not be solid proof, but perhaps enough to get them to waive the penalty.

I'm having a similar problem.

For 2008 I asked that they apply my refund to next years taxes. It was enough that I didn't need to pay estimated taxes for 2009 (I had way overpaid).

I got a notice after I filed my 2009 taxes that I owed money, including interest on the estimated taxes I failed to pay. So I called, and they told me they had no record of my 2008 taxes. The lady didn't sound concerned, and said, "hmm, it probably got filed under the wrong SSN". I replied, "oh, THAT would be bad". She said "Oh, it happens all the time!". Um, OK. The next level she bumped it up to said the same thing.

So I resent my 2008 taxes to the person and address they specified - that same day. I just got a letter back one week later that corrected the original problems, but now is charging me a $30 late filing fee. It doesn't specify which return was "late". Seriously? I'm getting tired of wasting stamps and time on this! I was tempted just to pay it to get it over with, but this is just not right.

I just wrote up an appeal and sent along yet another copy of my 2008 return with the print date (the night before I mailed it) still at the bottom of almost every page. I hope that is enough.

Understand this simple fact of life: EVERY STATE NEEDS MONEY DESPERATELY!!

That being the case, they are unlikely to cut you ANY slack on waiving penalties unless you can clearly prove the penalties are not warranted.