Payroll Garnishments

Today TaxMama hears from Rebecca in California who is facing serious problems.
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“We don’t know what to do, and now that the CA franchise tax board has garnished my paycheck, we don’t have any extra funds. This is based on tax returns not filed for 1999 and 2000. What can we do?”

Dear Family,

About the most frightening and embarrassing thing that can happen is to get called into your boss’s office to learn your employer has received a garnishment notice from IRS or the state.  It’s downright humiliating! In some cases, people have even lost their jobs over this.

How can you avoid this problem?

1)       ALWAYS be sure to file all your tax returns. Never assume. You’ve heard the old saying – ASS U ME = making an ass of U and Me. If you did not sign that tax return – and mail it in, or get a confirmation of the efiling – then your tax return has not been filed.

a.      If you’re not sure whether a certain prior year return was ever filed, just send IRS a Form 4506-T and request a free transcript.
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If no return was filed, you will be told.

b.      Note: Neither bankruptcy nor offers in compromise will eliminate tax debt if you have not filed a tax return.

2)       When you get notices, open them. You’d be shocked to learn how many people never open those notices! Respond to them – or hire someone else to respond to them – and get copies of any written correspondence they send.

3)       If the notices are about balances due, if you cannot pay the balance, call the tax agency to arrange an installment agreement or hardship hold. They will rarely send out garnishment notices if you are working with them to solve the problem.

4)       Both IRS and your state have Taxpayer Advocates or Ombudsman, or some office with the ability to help you when you cannot get help from your tax collector’s office.

5)       If all else fails? Contact your US or State senator, representatives or whatever passes for your political representative on a federal or state level, depending on which agency is after you. You’d be surprised. They actually can get you some relief – or some help. Remember, they are there to help you.
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Whatever else you do – don’t do nothing. Rebecca’s plight is heartbreaking. You can definitely identify with her problem. You can see how, through despair, it got ever worse. Which only deepens the despair. It’s really hard to do this alone. Too bad there isn’t a Tax Debt Anonymous around for group help. Hmmm…maybe there will be! Stay tuned for interesting developments over the next couple of months!

And remember, you can find answers to all kinds of questions about tax problems, and other tax issues, free. Where? Where else? At www.TaxMama.com.

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