Has the IRS threatened to take your home for small tax debts (under 10K)? Goodbye from Mimosa.

[Mimosa]

This might well be my last post on Democratic Underground. regard this as my 'goodbye' post, although I don't want to go. :( *crying*

I am scared the gov will get mad because I post the wrong things. I have reason to believe this.

My partner and I usually bring in under 50K a year but health care out of pocket expenses including premiums and Rxs cost us well over 12K. Being self employed, paying for helth insurance premiums as well as trying to keep up with self-employed FICA mean we fall behind *all the time*.

Usually we can make payment deals with the IRS. But lately they are saying NO. We owe 8K for taxes. Sale of our condo in this down market might not reap them that 8K. Mortgage might be underwater. But the IRS TODAY sent a letter stating they will file to take away our unpaid for condo. We bought it 4.5 years ago. The value has gone down. But the fear of losing my roof and home is scaring me to death. let me stress again that I am in the under 50K income level and am approaching age 60.

So the federal government is threatening to take away our home because my partner and I can't afford to keep paying 12K a year for health insurance premiums and also pay quarterly taxes. There is no way to pay health insurance premiums and taxes at the same time. We are broke.

But the IRS rep said they send out the 'we will file to foreclose on your house' letters all the time. She said they do it to 'get attention'.

I'm scared. I'm very scared, and sick. I'm not on SSI. I have no means. My partner works 12 hours a day to pay our bills. Tthis might be near my last post on D.U.. :(

The government needs big money for the continuing wars. They don't seem to be going after it from the rich people who profit from wars.

But, I'm an idiot. I'm low hanging fruit. They've scared me. I think they know I post here and say all the wrong things. I think the intimidation factor is playing out.

I don't want to leave D.U. ever. But I know i have posted all the wrong things. *crying*

[MinneapolisMatt]

1. A huge hug to you, Mimosa.

I wish had something profound to say to help, but know that I'm sending you a big hug.

:hug:

[babylonsister]

2. Oh dear, Mimosa,

I have no advice to give, just a k&r, and a hug to you both. :hug::hug: Hopefully someone with some concrete advice can help.

[Warren DeMontague]

3. One, get a tax attorney. I'm not one, nor do I play one on tv, but my guess is, they don't actually

want to take your condo. Certainly not if it's underwater.

[FSogol]

28. +1, n/t

[madmax]

4. I'm so very sorry Mimosa - you've seem to have

had more than your share. No words. :hug:

[panader0]

5. Don't fret too much

I made less than 18 K last year but pay only $9.95 a month for my (shitty) dial-up.
DU is a cheap thrill.
Good luck.

[Sonoman]

6. I agree with the IRS rep.

Scare tactic.

Taking action on your house for an $8K debt makes no sense, even for IRS.

Filing a lien would be their most probable tactic, in my opinion and from my experiences with the bastards. I owe them brazillions of dollars and they cannot even find me in our little town. Heck, my names and business probably make the local paper at least once a month.

Don't cry, Mimosa, take heart.

Sonoman

[Mimosa]

9. Sonoman, thanks for the info

I sure would appreciate the name of a family law type lawyer in Atlanta GA. :)

[lbrtbell]

12. That's not the kind of lawyer you need

Look in the Yellow Pages under Attorneys--they'll be listed by type--and find the ones who specifically deal with taxes. They'll usually take payments, so you don't have to pay the whole fee at once.

Also, I highly doubt this has anything to do with posting to DU. People in my family had tax problems before DU even existed.

I can tell you, from experience people in my family have had with the IRS, that they'll usually just put a lien on your home.

I found this site, which explains what happens during the most extreme scenarios (seizure of property), so you can determine whether or not they'll actually be able to do it. Part of this article says:

"To protest a seizure or the mere threat of a seizure you may file Form 911, Application for Taxpayer Assistance Order; Form 9423, Collection Appeal or Form 12153, Application for Collection Due Process Hearing. However, if your case has gone that far, you need professional assistance."
http://www.etaxes.com/seizures.html

I see it's a site for a company you can hire you to protect you against the IRS...but if you consider them, do your homework to make sure they're on the up-and-up. Google the company's name along with the word "complaints".

Also, DO NOT fall for the TV ads by Roni Deutch. A member of my family got ripped off by them big-time, and they were telling her to hide her assets from the IRS! Not surprisingly, there are many complaints about them. Here's Jerry Brown's take:
http://blogs.forbes.com/williampbarrett/2010/08/24/tax-lady-roni-deutch-is-no-lady-jerry-brown-says/?boxes=Homepagechannels

Try the Yellow Pages first, and check the attorneys out at the Better Business Bureau website before you hire them. Definitely get help--you shouldn't face the IRS alone.

Good luck!

[wellstone dem]

16. excellent advice

agreed. Another idea, check to see if there are any tax lawyers on the board of your local Legal Aid.

[virgdem]

22. Absolutely, you need a tax attorney...

they are well versed in tax laws and know how to deal with the IRS. As to losing your home, just a scare tactic from IRS - they usually file a lien against your house for what is owed, especially if it is under 10K. Contacting a tax attorney is your best bet to deal with and resolve this problem with the IRS. About 20 years ago, my hubby and I were in a somewhat similar situation, as the IRS claimed that we owed $18K on a business that my husband was involved in. It turned out that they double counted the 940\'s (employee wages). We contacted a tax attorney and ended up paying only a very small amount (interest and penalties accrued). Good luck in resolving a very aggravating problem.

[Sonoman]

14. Do you or your partner know a really good CPA?

If so, get in touch with her/him and seek advice on a tax attorney. All tax atty's despise the IRS.

Just don't let the bastards grind you down. Always keep in mind that they mainly want to make you miserable, the $8K is simply the sticking point, the irritant. They love it when they have you off-balance.

Hang in there, they are pretty feckless in the long run. And don't worry about what you post on the Internet, as they are not nearly savvy enough to glean anything from that.

I am going to PM you a cool little story.

Sonoman

[socialist_n_TN]

18. I agree with sono..........

It seems like a scare tactic to me. I know I've run across people in my former line of work who were trying to buy or refi a house and they had a tax lien on it, so they couldn't buy or refi, BUT THAT WAS THE EXTENT OF IT. And sometimes those liens were for MUCH more than 8k. Has your partner missed any scheduled monthly payments? Sometimes that can trigger these types of threats.

Don't freak, but DO contact a tax lawyer. And GOOD LUCK to you.

[EFerrari]

38. There is a new practice where they contract out the debt

and then the contractor does the garnishing.

So, I'd be careful. It's the last way to rip people off and they found it.

[Tsiyu]

7. I had no idea they could seize your home

I thought a lien meant the debt was satisfied when you eventually sell, not that they would force a sale.

But I know nothing, so I'm not helpful.

I am so sorry for what you are enduring. The stress can't help the illness any.

Sending good thoughts your way for a $$$$ infusion.

:hug:

[elleng]

8. See a tax attorney. I have.

:thumbsup:

[enlightenment]

10. I don't know if this will help you figure it out, Mimosa, but

it doesn't look like the IRS will really take your home:

http://www.etaxes.com/seizures.html

Good luck - and keep your chin up. Don't worry about posting at DU - what on earth could they do with anything you say here? They've been using these brown-shirt tactics for a long, long time; don't fall for them.

[HipChick]

11. talk to a tax lawyer.. IRS sent me a bill for $30K...the IRS thrive on the intimidation factor

by the time I got done, the bill was down to under $1K

[notesdev]

13. The IRS are bill collectors

so expect every low down dirty trick that any other kind of bill collector might do.

Doesn't it suck to be terrorized like this by your own government?

[wellstone dem]

15. I agree, talk with a tax lawyer, but here's some info

But in the mean time, read this about how realistic the threat to take your home really is.

http://ezinearticles.com/?Can-The-IRS-Really-Take-My-House?&id=897942

And from another source

"This prohibition on seizures without recovery is in the Internal Revenue Code, specifically section 6331(f), which prevents uneconomical levies. You can also reference Internal Revenue Manual 5.10.1.2, which states that “Seizures where the taxpayer has insufficient equity in property – there must be sufficient net proceeds from the sale to provide funds to apply to the taxpayer’s unpaid tax liabilities.”

Also, keep in mind that Internal Revenue Code 6343(a) prevents an IRS levy if it creates an economic hardship. Seizing a car that will prevent you from going to work creates an economic hardship.

The numbers speak for themselves that the IRS is not usually in the car repo business. For the IRS fiscal year 2009, the IRS made 581 seizures made of real and personal property. With millions of taxpayers in debt to the IRS, seizures of hard assets are relatively rare. Of the seizures made, the vast majority were real estate, with a much smaller percentage out of the 581 being vehicles.

In other words, it is quite unlikely that the IRS wants your car. The same logic applies to your house. The real concern is your wages, bank accounts – liquid assets."

http://howardlevyirslawyer.com/blog/

[Th1onein]

17. 412-787-5280 Fred Leichti, tax attorney and CPA

Very good at what he does. And honest.

[Mimosa]

24. THANKS.

I'll check it out.

[nessa]

19. Link to another site with some good information...

and information for a good tax attorney.

http://www.bjhaynes.com/

Don't go with the Roni Deutch or any of those large national firms. Whoever you decide to call, google them first. Google their name + complaints.

The IRS Manual that their collections people are suppose to follow is online. It has a search feature you can use to search for information specific to any notice you may received.

http://www.irs.gov/irm/part5/

[happyslug]

20. Is the IRS actually foreclosing or just doing a tax lien?

If it is a tax lien, not much of a problem. All it means is if and when the house is sold, the IRS gets paid. The IRS does that all the time, and I suspect given the present market doing it more and more to protect the Right of the IRS to get paid before any other subsequent judgment holder.

State laws still sets priories as to sale (And whatever the state gives itself on that prior ty list, is the same status the IRS gets). In Addition to the right to sit in the same position as any state tax, the IRS has its own rules as to tax lines. This dual way to have a valid lien complicates how to look at an IRS tax Lien.

Under State law (And thus under IRS law) once a lien is on record it gets paid before any subsequent liens (Remember this is in addition to any Federal Rights, so it is more complicated then it appears on the surface). The only real fear for the IRS is if the first lien holder on the property does an actual foreclosure. In such a case, all subsequent liens are wiped clean (including any state or IRS Liens). You will still owe the money, but the house can be sold free and clear of such debt (And it is better, if you are a buyer of the property, to get a letter from the IRS that the tax lien has been removed, not always easy to get until the IRS debt is repaid in full).

Thus, is the IRS actually doing a "Foreclosure sale"? I doubt it, for any prior lien on the property must be paid first (i.e. your mortgage). I suspect this is only a tax lien, but look at the documentation and talk to a lawyer in your area to see what is occurring. This is an interaction between State and Federal law, and as such varies to much from state to state to give more details then I have above.

[Romulox]

27. I think this poster has some of the best advice/insight into the matter.

happyslug's response deserves more attention.

[Dappleganger]

21. I am so sorry...

this is so unfair. :(

[Daphne08]

23. Find a tax attorney. I'm so sorry you have to go through this.

:hug:

[Mimosa]

25. Thank each and all.

My partner and I just aren't making enough money to pay for health insurance costs AND making quarterly payments taxes. But we're both at the age where we need health insurance. But we are now going to have drop it so the IRS will get paid. God forbid if anything 'happens' to either of us healthwise.

It's awful
to be not poor enough for Medicaid but not able to afford to pay taxes and health insurance. I guess many are in the same boat.

I know the IRS is desperate for money to fund the wars. They don't seem to be getting anything from the rich. To come after people who make under 50K a year is scraping the bottom of the barrel. But we are easily pushed. And we really don't have the money to pay lawyers.

My partner thinks it may be dangerous for me to post here (of course everybody's IPs are traceable) and give strong opinions. 'The nail head standing up gets hammered down'.

I did hear 'foreclosure' when my partner was talking on phone to IRS agent yesterday. But a lien on somebody's property is very bad because it can hurt people's credit ratings. That hurts them in other ways.

[Mimosa]

41. The letter

I asked my partner to show me the letter. It says: "Notice of intent to levy

"Intent to seize your property or rights to property"
"Amount due immediately: "

The amount due immediately is 50 bucks short of $9,000.

My partner called. We had called to try to work out a payment plan late last year and they refused saying they want it all. But the person we talked to this last time is going to give us a bit more time. *eek*

So, now we know we have to drop health insurance premiums because we know we cannot afford both health insurance -even the bottom of the barrel $10,000 deductible kind- and keep up with taxes.

People over 55 and under 65 are having ir tough because nobody wants to hire us for full time jobs offering any benefits. :(

[area51]

26. I'm so sorry.

I hope things will work out in your favor. :hug:

[AtomicKitten]

29. Tax debt can be discharged under Chapter 13. nt

[Romulox]

30. There are significant limitations to this. Specifically if a lien has been taken.

Anyone interested MUST consult a Bankruptcy/tax attorney for all the specific details.

[AtomicKitten]

31. I consulted both; the bankruptcy attorney was helpful, the tax attorney not so much.

Filing Chapter 13 will stop action on the lien. After 3-7 years paying monthly (amount determined by the court), all debt including tax debt will be discharged.

I agree, the OP should consult an attorney. I'm glad I did.

[Romulox]

32. A successful Chapter 13 plan will pay off IRS tax liens in full. nt

[happyslug]

33. No, Taxes can NOT be discharged in Chapter 7 or 13

Chapter 13 can set up a payment plan that in theory pays all debts within at least five years, but can NOT discharge any tax debts. The only way a chapter 13 can lead to a discharge of debt is first to get all the non-dis-chargeable debts paid off (i.e. the back taxes) then get any other non-dis-dis-chargeable debt no it is longer in arrears (i.e. your mortgage payment is made current and your equity on the house is less then the Federal or State exemption for real property, the Federal Exemption is $25,000 plus the inflation rate since it was last revised in 2005) and then convert the Chapter 13 to a Chapter 7 and discharge all of the rest of your debts. That may take three to seven years, but notice the taxes MUST be paid OR the IRS agrees to some sort of reduced payment to resolve the tax debt.

[AtomicKitten]

35. Chapter 13 does, in fact, discharge tax debt. I did it.

In fact, I just finished a 5-year plan and emerged from bankruptcy this year.

[Romulox]

40. You're both *partially* correct. *SOME* tax debt may be discharged in BK,

with significant limitations relating to things such as the age of the debt and the date your tax returns were filed. In addition, a major limitation is that IRS tax liens are not discharged in either Chapter 7 or 13!

As always, anyone for whom this information applies MUST consult with an attorney!

[suffragette]

34. I'm so sorry Mimosa

Others can give better advice on information you need to access for the legal side.

What I can say is that I hope you will stay on DU
:hug:

[WolverineDG]

36. it is a scare tactic, but they will act if you do nothing

I second, third, fourth the advice to consult with a tax attorney &/or CPA. Yeah, you have to pay them too, but it's that or lose your home.

I got a love letter from the IRS 2 years ago & almost died of shock (it was not at the "we're going to take your house" stage, but still, not a pleasant experience). Thankfully, a good friend recommended her CPA to me & we got it all straightened out. I did have to pay, but not the :wtf: amount they initially demanded.

dg

[Codeine]

37. The IRS neither knows nor cares about your DU posts.

Not even a little. Not a smidge.

[Mojorabbit]

39. We used to make payments also

and got the threat letters at the beginning of every year. Each year you have to renegotiate to make payments. Have you called them since this years threat letter? Might be worth a try.
Best of luck. Sending you a big :hug:

[Mimosa]

42. The Letter

I asked my partner to show me the letter. It says: "Notice of intent to levy

"Intent to seize your property or rights to property"
"Amount due immediately: "

The amount due immediately is 50 bucks short of $9,000.

My partner called. We had called to try to work out a payment plan late last year and they refused saying they want it all. But the person we talked to this last time is going to give us a bit more time. *eek*

So, now we know we have to drop health insurance premiums because we know we cannot afford both health insurance -even the bottom of the barrel $10,000 deductible kind- and keep up with taxes.

People over 55 and under 65 are having ir tough because nobody wants to hire us for full time jobs offering any benefits. :(

We'll get through this somehow. But I also worry about all the other people who are being put in this situation. The fact that our government makes us feel scared. Not the rich, just people like us who are always hanging on by our fingernails to some bare bones of security. This isn't right.

People in Canada, the UK, Europe, Australia can all have some health care not affiliated to having a full time job or being able to afford over $1,000 a month. And BC/BS had sent me notice that my premium would be going up by $400 a month anyway! So dropping health insurance is the only way out of this hole.