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Thread: Question re: IRS seizure of savings accounts.

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    Default Question re: IRS seizure of savings accounts.

    One of the other employees where I work called me earlier today to ask about finding an attorney. But the lawyer I hired last year only handles wills, trusts, etc., so I didn't know what to tell him.

    All I know is he said he paid the state a few hundred dollars over some disputed taxes, but earlier today, the IRS has apparently cleaned out his wife's savings account without any prior notice. I have no idea as to what the dispute is about between them and the IRS. Is there anything at all they can do now? I don't know if a tax attorney can help them or if it's too late for that now. Thanks!

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    Default Re: Question re: IRS seizure of savings accounts.

    They are simply fucked and should become accustomed to living a cash lifestyle.

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    Featured Member Vamp's Avatar
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    Default Re: Question re: IRS seizure of savings accounts.

    Was it a joint account or only in her name? If it was joint it could be related to his issues or if it is only in her name it could be a whole other issue.

    I would first call the bank. They can usually tell you how much the total garnishment is for. Sometimes it just freezes the account, or is for more that what was pulled, or even less than what was pulled.

    Then i would call the IRS to find out why it was pulled and any other particulars. Why call both? To make sure what is happening to account agrees with what the Irs is wanting to do. Garnishments are sent as a court order to the bank. It is the banks job to implement them correctly. Usually they are but once in awhile there is an error.

    After all of that, if they disagree with what is going on, then i would call a tax attornery.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Question re: IRS seizure of savings accounts.

    I doubt the IRS would just liquidate her account without notice. Perhaps its a freeze? They havn't received letters or anything? Your friend's story seems suspect, perhaps because he doesn't want to divulge the details to his colleauge.

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    Featured Member Vamp's Avatar
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    Default Re: Question re: IRS seizure of savings accounts.

    From my experiance working branch level, they will garnish wages and or accounts without notice of what they are doing.

    They will give you notice of amounts owed. But they never tell you about a garnishment. If they did people would clean out their accounts before it was processed.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Question re: IRS seizure of savings accounts.

    Indeed the IRS can seize a person's assets to cover a large back tax bill. Indeed they do not need to give specific notice that they are planning to do this. Nothing is required beyond the original 'IRS Notice of Deficiency' which officially informed the taxpayer that they owe a shitload of extra tax money to the IRS, plus X amount of time passing without the IRS receiving payment from the taxpayer or some form of 'official' dispute being filed with the IRS (such as requesting an IRS Tax Court hearing).

    Once a seizure has taken place, it definitely requires a 'settlement' with the IRS in order to get them to drop liens and garnishes and to return seized assets. However, this is fairly difficult to finance if the IRS has already seized bank account balances and is garnishing an extra percentage of every future paycheck.

    As Deo already posted, anybody who has allowed an IRS Deficiency to proceed to the point of liens, seizures and garnishes should prepare to live a cash only lifestyle for a very long time (with a pretty good scarcity of cash to boot !).


    As Vamp points out, where joint accounts are concerned it is (remotely) possible that one of the people listed on the account may not be party to the back tax bill owed by the other person to the IRS. One possible example is a joint bank account in the names of two people who have recently been divorced, and where the divorce degree specifies that only one of the formerly married people is responsible for back taxes. In such cases, the IRS has a procedure in place where the 'innocent spouse' can file with the IRS for relief. In general, joint accounts held by married persons and/or business partners can be seized on the IRS assumption that the tax liability is shared.
    Last edited by Melonie; 07-25-2007 at 04:41 PM.

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    Default Re: Question re: IRS seizure of savings accounts.

    My thanks to everyone for your replies & advice. I talked with him at work this morning, and it's already settled. I misunderstood him. His wife had taken care of their state tax bill already. He was concerned about our company accountant taking out an IRS payment from his paychecks. It turned out they owed not quite $150, so he called the IRS and pui it on his credit card. Our company accountant erred due to a smudge from an inkjet printer, which she then misread as being for a much higher amount. So they're fine. Thanks again!
    Last edited by PhaedrusZ; 07-25-2007 at 06:24 PM. Reason: typo

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    Default Re: Question re: IRS seizure of savings accounts.

    I only keep enough money in the bank to cover the checks I need to write. The ba nks offer next to nothing for interest on savings and yo need to keep considerable amounts in them anyway in order to get them, otherwise its a monthly fee for the account.

    fuck you - I dont need to pay you to keep my money in your bank

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    Default Re: Question re: IRS seizure of savings accounts.

    Money talks. But also having a bank account with 5K in it gets one better credit. If it's always cash and carry really not much need to worry. But if you get into investing you will want to show "staying power" with assets. Someone once told me to get 10k in a bank and just leave there and forget about it. Then start diversifying with some stocks and bonds and real estate. The younger you can start the better. Stocks and bonds need to be of the group investment kind at first unless you know some really well. In real estate, always do the homework. Compare, ask questions. Don't pay extra for a good deal. I was burned on that philosophy. What that really means is you should be paying less than asking price.

    My best residential real estate has always been four plexes with 2br apts. People have made a lot of money on houses, but that is little more edgy and quick for my tastes.

    Oh, but my question really was do you declare tips? My mom as a waitress never did and felt she was being robbed when the Govt started making her declare them.

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    Default Re: Question re: IRS seizure of savings accounts.

    Quote Originally Posted by 200singles View Post
    I only keep enough money in the bank to cover the checks I need to write. The ba nks offer next to nothing for interest on savings and yo need to keep considerable amounts in them anyway in order to get them, otherwise its a monthly fee for the account.

    fuck you - I dont need to pay you to keep my money in your bank
    So how much interest is the money earning you sitting in your piggy bank?

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    Default Re: Question re: IRS seizure of savings accounts.

    Quote Originally Posted by podx View Post
    Money talks. But also having a bank account with 5K in it gets one better credit.

    Just for the record, because i know many here are learning about building credit, and to cut down on confusion....

    Having a large bank account does not build credit on a credit report. But it will give you perks at the bank you are dealing with.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Question re: IRS seizure of savings accounts.

    Quote Originally Posted by 200singles View Post
    I only keep enough money in the bank to cover the checks I need to write. The ba nks offer next to nothing for interest on savings and yo need to keep considerable amounts in them anyway in order to get them, otherwise its a monthly fee for the account.

    fuck you - I dont need to pay you to keep my money in your bank
    Well if you hate fees and hassles i suggest going to a credit union.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Question re: IRS seizure of savings accounts.

    Vamp, you are correct. The best way to start credit is a small revolving store card or bank credit card. And most importantly, pay it off every month and don't buy food with it.

    The 5k checking/savings account will be noted on all applications for credit that you make. It will make you stand above a lot of other applications. The bank you bank with will much more likely be willing to give you a credit card. And at 10k they usually waive the fees.

    I myself have a horrible time at the moment saving 5k. And one thing that has surprised me about this board is that I have learned some interesting stuff on managing money.

    Credit cards? does anyone really need them? I have a lot of them and they can be an unwanted burden. I borrow against my future to have fun today with a dancer. I am very impressed when I meet someone successul with no credit cards. Except maybe one to travel with.

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    Featured Member Vamp's Avatar
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    Default Re: Question re: IRS seizure of savings accounts.

    Quote Originally Posted by podx View Post
    Vamp, you are correct. The best way to start credit is a small revolving store card or bank credit card. And most importantly, pay it off every month and don't buy food with it.

    The 5k checking/savings account will be noted on all applications for credit that you make. It will make you stand above a lot of other applications. The bank you bank with will much more likely be willing to give you a credit card. And at 10k they usually waive the fees.

    I myself have a horrible time at the moment saving 5k. And one thing that has surprised me about this board is that I have learned some interesting stuff on managing money.

    Credit cards? does anyone really need them? I have a lot of them and they can be an unwanted burden. I borrow against my future to have fun today with a dancer. I am very impressed when I meet someone successul with no credit cards. Except maybe one to travel with.
    Not trying to hijack this thread but ....

    What you buy with your credit card doesnt matter about building credit. The only time a large savings account is taken into consideration is when you are applying for a loan at the same bank the account is held with. If you applying for a loan with another bank outside of where you keep your savings it is NOT taken into consideration.

    If you have a credit card with the same bank that you also have a savings account with it does NOT mean they will waive any fees. Each bank is differant with their policies.

    Once again im not trying to be argumentative... just making sure others dont get confused.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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