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IRS Outside Collection Agency

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Cardinal1957

Member
I am residing in Georgia.
I recently received a letter from an external collection agency on behalf of the IRS stating I owe taxes from 2012.
I am not disputing the tax.
My question is,( I cannot afford to pay large sums monthly because basically I live paycheck to paycheck.) if I just send them 25.00 per month even if they want more, can they still take me to Court and get a judgement against me?
I will add, I just declared ch7 bankruptcy, so doing that again is not an option.
Thanks for any input. I need to know how to protect myself.
 


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davew9128

Junior Member
The collection agency won't take you to court. The IRS will possibly file a notice of tax lien if they haven't already done so. You are not required to deal with the collection agency. Whether you choose to deal with the IRS directly or the agency instead depends on what you're looking to do. The IRS is more flexible in what they can do but they also have more tools at their disposal to enforce collections.
 
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Cardinal1957

Member
Thanks davew. I have no problem paying on my debts, I am just trying to avoid getting totally screwed. I own no property (still paying on my car) so I'm not sure how a tax lien would affect me. Also, I am an independent contractor, not an employee (I deliver newspapers).
I have been told that garnishing wages is not something I need to worry about.
 
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Taxing Matters

Overtaxed Member
Cardinal1957 said:
My question is,( I cannot afford to pay large sums monthly because basically I live paycheck to paycheck.) if I just send them 25.00 per month even if they want more, can they still take me to Court and get a judgement against me?
Click to expand...
Ok, a couple of things to understand about this. First, once the tax is assessed and is not paid a statutory lien arises on all your property and rights to property. After the initial demand notice the IRS must send you at least one other notice, known as the notice of intent to levy, giving you 30 days to pay or file an appeal of the levy determination. That notice is sent by certified mail to your last known address. If you don't do either of those things then the IRS may start attaching any income or assets that you have that are not exempt from attachment under the federal tax code. That can include attaching your payments from the newspaper publisher/distributor.

So if you don't reach some agreement with the IRS on resolving the tax liability and just send $25/month the IRS can proceed to start taking your bank accounts, attach your income, etc, once that notice of intent to levy expires.

The good news is that the IRS will take into account your current financial circumstances in figuring out what you can pay. If it turns out that you cannot really afford to pay anything because you are just scraping by then the IRS will simply defer collection on the liability until your income goes up and you can afford to pay something. Or if the IRS determines you can only pay $25/month, it will set up an installment agreement for that. You may need to complete a financial statement form for the IRS. The key thing, though, is that you need to ensure that future returns are filed and paid on time.

How much do you owe? And for what tax years?

Cardinal1957 said:
I will add, I just declared ch7 bankruptcy, so doing that again is not an option.
Click to expand...
When did you file bankruptcy and did you get the discharge already?
 
C

Cardinal1957

Member
Taxing Matters said:
Ok, a couple of things to understand about this. First, once the tax is assessed and is not paid a statutory lien arises on all your property and rights to property. After the initial demand notice the IRS must send you at least one other notice, known as the notice of intent to levy, giving you 30 days to pay or file an appeal of the levy determination. That notice is sent by certified mail to your last known address. If you don't do either of those things then the IRS may start attaching any income or assets that you have that are not exempt from attachment under the federal tax code. That can include attaching your payments from the newspaper publisher/distributor.

So if you don't reach some agreement with the IRS on resolving the tax liability and just send $25/month the IRS can proceed to start taking your bank accounts, attach your income, etc, once that notice of intent to levy expires.

The good news is that the IRS will take into account your current financial circumstances in figuring out what you can pay. If it turns out that you cannot really afford to pay anything because you are just scraping by then the IRS will simply defer collection on the liability until your income goes up and you can afford to pay something. Or if the IRS determines you can only pay $25/month, it will set up an installment agreement for that. You may need to complete a financial statement form for the IRS. The key thing, though, is that you need to ensure that future returns are filed and paid on time.

How much do you owe? And for what tax years?



When did you file bankruptcy and did you get the discharge already?
Click to expand...
My bankruptcy was discharged August 8 of this year.
The tax year in question is 2012.
I owe for last year but can pay that in December when I get Christmas tips.
So it is just $4000.00 for 2012.
 
D

davew9128

Junior Member
Cardinal1957 said:
My bankruptcy was discharged August 8 of this year.
The tax year in question is 2012.
I owe for last year but can pay that in December when I get Christmas tips.
So it is just $4000.00 for 2012.
Click to expand...
Was the tax debt included in the BK discharge? If not, why not?
 
D

doucar

Junior Member
It may be possible to reopen your bankruptcy to add the tax debt, depending upon what circuit you are in.
 
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Taxing Matters

Overtaxed Member
Cardinal1957 said:
Now THAT was worth the cost to join this forum. LOL. I may look into doing that. I never knew it was possible.
Click to expand...
That's exactly why I asked the questions about the bankruptcy and what year the tax liabilities were. The general rule is that federal income tax liabilities are eligible for discharge in bankruptcy if on the day you filed the bankruptcy petition it had been more than three years since you filed the tax return and more than 240 days since the IRS assessed the tax. Contact your bankruptcy attorney. The tax may have effectively been discharged with your discharge order or you may be able to reopen the bankruptcy to have it included in the discharge.
 
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Cardinal1957

Member
Taxing Matters said:
That's exactly why I asked the questions about the bankruptcy and what year the tax liabilities were. The general rule is that federal income tax liabilities are eligible for discharge in bankruptcy if on the day you filed the bankruptcy petition it had been more than three years since you filed the tax return and more than 240 days since the IRS assessed the tax. Contact your bankruptcy attorney. The tax may have effectively been discharged with your discharge order or you may be able to reopen the bankruptcy to have it included in the discharge.
Click to expand...
I didn't use an attorney, I couldn't afford one. I did the research and filed myself. I will check to see if I can reopen the bankruptcy in my district.
 
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