IRS levy and garnishment

[grandmasusan]

I thought I was doing the right thing by contacting the IRS yesterday to inquire about my 65k tax bill from 2005. I actually recd a refund of 5k this year so I was asking to see if they would apply it to what I owe. I spoke to a nice guy (so I thought). After confirming all my information including employment and banking, he proceeds to tell me that they have requested a bank levy at my credit union. Of course he tells me AFTER I told him I have another bank acct at a different bank. I panicked and called my attorney that I plan on hiring and he told me to run to the bank and take out everything I could. He also said that the IRS will probably request a levy on the 2nd bank acct since I so nicely gave that info to them. I didn't plan on filing for Chap 13 till 2-3 more months so I can save money but my attorney says that they will probably go after a wage garnishment since I helpfully confirmed where I work along with my spouse!

I feel like an idiot for giving so much info, but at least I am aware of what the IRS is trying to do. I was able to take out all the money this am so they won't get more than 10.

Does anyone have any experience with owing money to the IRS? Are they pretty quick to get the wage garnishment after a bank levy? I just don't know how much time I have. My attorney thinks I should file by May 1st. I was hoping I could file in June or July...but I need to stop the wage garnishment. Does the IRS have to give you warning that its happening?

Thanks for your advice!

[keepmine]

The IRS won't give any warning. They'll just snaggle your check.

[treehugger1]

With a wage garnishment, you won't necessarily get a warning from the IRS. You might get a warning from a priviate creditor or collector, since they have to sue you, but you won't neseccarily hear from a public entity. Once they are in your paycheck, you are probably stuck. Just make sure your employer is abiding by your state garnishment laws. Other than that, you might want to consider filing sooner.

In terms of your bank acount, it might be wise to immediately move to a new bak and at least set up a checking account that has a debit card. I would drop any direct deposits and get a paper check.

[SinkingFast]

There were a couple of people here who were very knowledgeable about dealing with the IRS but they don't post here any more.

We were in a pickle in that we owed $8K for '05. Those folks said things like, "Sure! The IRS takes payments!" and "It's no problem to set up a payment plan with the IRS." Both comments were **Wink, Wink** ** , ** Very "tongue in cheek" type comments.

I did a little research and learned a payment plan with the IRS comes with an IRS Lien on your Credit Report. Prospective Lenders will not do business with people who have an IRS Lien on their Credit Report.

Since rebuilding Credit was very important for us coming out of Ch 7, we sold our truck to pay the IRS in full. Before April 15th even.

In addition to Tree's comments about switching banks, using a Debit Card, and getting paper paychecks,......... I'd add,........... Pay your bills with Money Orders as much as possible. You don't wanna write checks to pay your bills and have those checks bouncing all over town. Money Orders gets the Cash gone NOW!!

[grandmasusan]

thanks to everyone who responded. if i do take out the money from the bank and use money orders to pay my bills, i still run the risk of a wage garnishment that could happen at any time, right? that is what i am worried about...

i have till may 12th to get back to the irs about payment arrangements, but they could still levy my wages and bank! even though the irs agent said they wouldn't do anything till i get back to them. famous last words!

i just don't see how i can pay back 68k. we've accrued 8k in the past year in penalties and interest!

[BKOnce]

IRS is like police, they have their own enforcement dept. I once saw on TV these guys wear IRS jackets with guns stomping into people house to arrest them. Probably tax evasion problems?