• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Tax error snowballs

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

U

Uninformed in M

Guest
What is the name of your state? MD

I recently received a letter from the Dept. of the Treasury, Financial Management Service stating the my federal tax refund for the previous tax year was forwarded to the State of Maryland in accordance with a notice that was sent to me explaining the amount and type of debt I owe. I received no such notice. After contacting the Maryland Comptroller of the Treasury Compliance Division, I was told that this pertained to state tax owed by me to the state of Maryland for 2001. I did not move to Maryland until the summer of 2002. I sent the Maryland office copies of my 2001 tax statements that I filed in my legal state of residence at that time. They accepted this as proof that they were in error and that they were notifying the Collection Section to stop all collection activity. I e-mailed that I was concerned about my credit being effected, as I had no idea how long this process had been going on, and how far it had gotten (I still had received no notification or accounting of the so-called debt ). When I got a reply, I was told that the garnishment process was underway and that they sent a letter to my employer to stop this process. I have been working with the payroll office on my end, but I work for the Federal government, so it’s out of reach from my end. When I asked how this all happened, I was told that an address list was sent to Maryland from the feds listing my address as Maryland (which was correct as of the summer of 2002) so instead of checking on my previous status, they automatically assumed that I had not filed the appropriate state tax return. They also told me that this wasn’t caught because of the illegible social security number on my 2002 tax form (which isn’t true, the copy I have is perfectly legible, as attested to by co-workers). My question is what recourse do I have if they are unable to stop the garnishment process before the next pay cycle starts and I can’t pay bills on time. Also, how do I know that this hasn’t already affected my credit rating, and what do I do if it does?
 


R

Rainaraines

Guest
Were you sued? They have to have a judgment against you to garnish your wages. You need to pull your credit to see if this has affected it (www.freecreditreport.com). If so, you need to dispute it ASAP. If the garnishment somehow goes through, you should be reimbursed that amount, and can ask that they have to pay any late charges/overdraft fees, or any other fees that you have incurred because of their mistake.
 

Ladynred

Senior Member
A lawsuit and subsequent judgment may NOT be needed when it comes to matters of state and federal tax debts- they just take what they want - basically.

You really don't want to use 'freecreditreport.com' - you have to sign up for a yearly service and if you don't cancel it, you get charged. Further, what you'll get is a tri-merge report of all 3 bureaus - also NOT what you want. Those tri-merge reports lack critical details. You need to order a report from each of the 3 CRA's - Experian, TransUnion, and Equifax. They cost $9 each, and you may be able to get a free report anyway. You're in luck, MD residents are entitled to a free report once a year:

Maryland: No charge for your first copy each 12-month period; $5.25 for additional copies
That info is here: http://www.experian.com/credit_report_basics/check_your_credit.html
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top