Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

IRS Collections: Part I, Background

Collapse
This is a sticky topic.
X
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • IRS Collections: Part I, Background

    This forum primarily deals with bankruptcy but as most are aware, there are categories of taxes that cannot be discharged in BK. Thus, I will attempt to provide some useful information on how to deal with delinquent taxes. Obviously, I cannot go into great deal (people write books on this stuff) but hopefully this overview will point you in the write direction.

    Dealing with the IRS is very different than dealing with regular, private creditors. The IRS comes at you from a position of strength in that they need not resort to the judicial process to get at your assets; the IRS can directly lien your property and levy against your property once you become delinquent in paying taxes. Also, you have very limited exemptions, aside from Child Support, Unemployment Compensation, and Workers Compensation, any other asset or income is fair game. The IRS can garnish wages, levy accounts receivable, levy bank accounts, foreclose a tax lien against your home, etc etc.

    However, the IRS is also, in some sense, easier to deal with because the collection process is heavily regulated, there are procedures and notice requirements that must be satisfied, and at almost every stage of the process, you have appeal rights. (you can thank the 1998 Tax Payer Bill of Rights). So, even though the bureaucracy can be intimidating, that same bureaucracy can be turned in your favor.

    Important Terms

    Lien: A tax lien is like any other lien. The IRS files these as appropriate, and the tax lien takes priority over most other types of liens or security interests. Thus, you cannot sell the property unless the lien is satisfied or removed. Strictly speaking, a lien is created by operation of law (i.e. automatically) as soon as a tax is owed, the Govt. makes a demand for payment, and you do not pay. However, for the IRS to take a priority position over other potential creditor or lienors, the IRS must file a Notice of Federal Tax Lien.

    Levy: A levy is the mechanism by which the IRS actually takes property. So, if the IRS wants to get the money in your bank account, they will issue a levy.

    CSED: Collection Statute Expiration Date. CSED is the statute of limitations for delinquent taxes. The IRS has 10 years from the date the tax was assessed to collect the delinquent amount.

    ACS: Automated Collection Service: This is the IRS's internal collection agency (so to speak), and they operate much like any other collection agency, ACS is a call center and their job is to send letters and receive the phone calls.

    Collection Process Overview

    The main problem with IRS back taxes, is that you can go a fair amount of time before they really get aggressive; but during this time, you are accumulating interest and penalties. You will receive the occasional letter, but nothing will seem very serious.

    Inside tip: All IRS letters and forms have a designation...when you receive a letter and the form number is preceded by "CP", that means the form was computer generated, but by the same token, the CP letters are usually not that serious (except for CP 90, see below). The form that "scares" many tax debtors is CP 504 which states "Urgent, we intend to levy..." This letter is no different than any strongly worded collection letter, it is designed to scare the tax debtor into action.

    The letter you want to look out for is CP 90 or Letter 1058...Final Notice--Notice of Intent to Levy. These are the true "last straw" notices. When you receive these letters, certain tax debtor rights are triggered; you have 30 days from the date of the notice to request a Collection Due Process hearing. If you do not request that hearing, then after 30 days, you are open to enforced collection, i.e. the IRS can levy your assets and income.

    The usual first stop for delinquent taxes is the ACS Unit (Automated Collection Service). ACS is essentially a giant call center that operates much like a collection agency. If the account meets certain criteria, eventually, the account will be assigned a local Revenue Officer ("RO"). However, between the time between ACS and assignment to an RO, an account is placed "in que." When an account is "in que", nothing can happen, the account is waiting to be assigned a revenue officer. Once assigned a local RO, the account is in active collection. You will receive numerous letters, phone calls, and even visits from this person. (Note, I have seen businesses and individual be "in que" for over a year).

    Liens and Levies

    Liens: I have already defined liens, so all you really need to know is that, for the most part, tax liens are unimportant. Granted, if you are trying to sell your home, and there is a tax lien, that will cause a headache, but the sole purpose of the IRS filing a Notice of Tax Lien is to simply place them self at the head of the collection line. Thus, do not freak out if you receive a notice of tax lien.

    Levies are the bad mojo. Levies are how the IRS seize money and assets. However, there are exemptions you can claim, and in some circumstances, you can undue the levy. You will want to follow the directions on the levy document. For example, if you are a business and the money that was levied in your bank account was for payroll, you can get that levy removed. Further, if you are individual, and if you can prove that the money in your account is for the health and well-being of your family, you can get that levy removed and the money back.

    In any event, that is a VERY general overview of IRS collection. Note, this process can go on for years.
    Last edited by HHM; 10-22-2008, 04:57 PM.

  • #2
    Question: Does the lein go on your credit report?
    Chapter 7 Pro Se....Discharged Feb. 2006

    Comment


    • #3
      Yes, tax liens can go on your credit report (that assumes, of course, that the tax liability is under your SSN).

      Unpaid tax liens can stay on your report for 15 years; and here is the bad news, PAID tax liens can stay on your report for 7 years.

      Comment


      • #4
        You mentioned that tax liens are automatic when you have a tax due. How soon is "automatic?" I filed April 15th and just got my letter of my amount due. I am waiting for bonus and wanting to see if they take my 1200 rebate and apply it. I am paying about 30/month in penalty and interest and plan to pay off in full within 2 months. Will they file a lien for that?
        Chapter 7 Pro Se....Discharged Feb. 2006

        Comment


        • #5
          So long as you pay that amount due, there should be no tax lien for the 2007 period.

          Basically, 2 things have to happen to create a tax lien:

          1. The IRS has to make a demand for payment (this will usually include a deadline for payment).
          2. You don't pay it.

          At that point, the IRS has a Federal Tax Lien. There is no paperwork, or anything that needs to be done by the IRS.

          Comment


          • #6
            i need clarification regarding the above.

            first query: can a letter from IRS district office detailing the amount of unpaid back taxes from 1993 and demanding payment be considered as having the government put a lien on my property? im asking this because i read somewhere that the lien automatically attaches on the property as soon as debtor received demand from IRS and does not pay.


            second query: i understand that the bankruptcy law has the 3-yr/2-yr rule on tax discharge but will this rules eliminate the assessment from 1993 to 2003 if the gov't has had a lien already?

            i just want to make sure because i have a 401K the amount of which exceeds my unpaid taxes

            i hope my question is clear, thank you

            Comment


            • #7
              I owe over $5000 Federal and $1600 State on my 2007 tax returns. My chapter 7 is an ASSET case. I am having trouble understanding whether the IRS and State are entitled to file a claim against my BK estate?
              12.10.2007 Filed CH 7
              01.14.2008 341 Meeting
              03.14.2008 No Objections filed :yahoo: :clapping:
              03.27.2008 Discharge of Debtor :yahoo: :yahoo: :yahoo:

              Comment


              • #8
                Originally posted by jamesch13 View Post
                i need clarification regarding the above.

                first query: can a letter from IRS district office detailing the amount of unpaid back taxes from 1993 and demanding payment be considered as having the government put a lien on my property? im asking this because i read somewhere that the lien automatically attaches on the property as soon as debtor received demand from IRS and does not pay.


                second query: i understand that the bankruptcy law has the 3-yr/2-yr rule on tax discharge but will this rules eliminate the assessment from 1993 to 2003 if the gov't has had a lien already?

                i just want to make sure because i have a 401K the amount of which exceeds my unpaid taxes

                i hope my question is clear, thank you
                First query, yes. If the govt. made a demand and you don't pay, the lien attaches automatically. However, for anything to come of the lien, the IRS must usually file a Notice of Federal Tax Lien.

                Second query, tax liens survive BK just like any other lien. However, if you have taxes that were assessed that are older than 10 years, then the statute of limitations has expired for the collection of that tax debt and the tax lien is void.

                Comment


                • #9
                  Originally posted by BearChaser303 View Post
                  I owe over $5000 Federal and $1600 State on my 2007 tax returns. My chapter 7 is an ASSET case. I am having trouble understanding whether the IRS and State are entitled to file a claim against my BK estate?
                  Yes, they can file a claim. Even though a debt is non-dischargeable, they have the same rights to assets of your BK estate as any other creditors. If the assets of the BK estate do not fully pay the debt, then the balance is still collectable.

                  Comment


                  • #10
                    Hi HHM, thanks as usual for your response. They have not filed a claim yet. It is actually past the deadline for a creditor to file a claim, but I think the government has more time to file one? Should I call them up and try to persuade them to file a claim, or should I not worry about it for now? Would the trustee be any help to me to get this done?
                    12.10.2007 Filed CH 7
                    01.14.2008 341 Meeting
                    03.14.2008 No Objections filed :yahoo: :clapping:
                    03.27.2008 Discharge of Debtor :yahoo: :yahoo: :yahoo:

                    Comment


                    • #11
                      If you are an assett case it would be better for them to file a claim because they are a priority debt and they may as well get it first!!! The rest of your debts will be discharged if nothing is left!

                      I think your thinking is right on. But please ask your attorney before contacting them about filing a claim.
                      Chapter 7 Pro Se....Discharged Feb. 2006

                      Comment


                      • #12
                        Well I hate my attorney, LOL, but will try to contact him...
                        12.10.2007 Filed CH 7
                        01.14.2008 341 Meeting
                        03.14.2008 No Objections filed :yahoo: :clapping:
                        03.27.2008 Discharge of Debtor :yahoo: :yahoo: :yahoo:

                        Comment


                        • #13
                          Originally posted by BearChaser303 View Post
                          Hi HHM, thanks as usual for your response. They have not filed a claim yet. It is actually past the deadline for a creditor to file a claim, but I think the government has more time to file one? Should I call them up and try to persuade them to file a claim, or should I not worry about it for now? Would the trustee be any help to me to get this done?

                          Correct, the govt has 180 days from the date of the first scheduled 341 meeting to file a claim. Also, you can file a claim on their behalf. You can call the IRS, order account transcripts for the periods with outstanding balances, fill out the Proof of Claim form (which you can probably download from your courts website), attach the transcripts and file the Claim with the court.

                          The trustee will probably not be any help in this regard.
                          Last edited by HHM; 06-16-2008, 09:11 PM.

                          Comment


                          • #14
                            Originally posted by HHM View Post
                            First query, yes. If the govt. made a demand and you don't pay, the lien attaches automatically. However, for anything to come of the lien, the IRS must usually file a Notice of Federal Tax Lien.

                            Second query, tax liens survive BK just like any other lien. However, if you have taxes that were assessed that are older than 10 years, then the statute of limitations has expired for the collection of that tax debt and the tax lien is void.

                            thanks a lot for the reply above.

                            i think i am in deeper problem right now, it seems that the IRS had issued a levy on my salary and my 401K. how can filing bankruptcy under ch. 13 help my situation?

                            im in a panic

                            Comment


                            • #15
                              Levy vs Lien

                              Hi HHM,
                              I have had a federal tax lien filed against me. Im in Arizona and I know we can have 25% of my wages garnished. So we the IRS have to file locally to garnish and can they levy an entire paycheck in AZ? I know other creditors have to file a judgement to get to my paycheck. Thanks for any help!

                              Comment

                              Unconfigured Ad Widget

                              Collapse
                              Working...
                              X