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Please Help! DocDon, Methuss, retmar, LadyNRed...


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I have a situation that I most certainly need further opinions on. Some may have seen my recent threads on the "Lawyer in the House" forum, but this has become a time related dilemma for me as the CA involved is not going to wait in limbo forever, and I need to act soon. I'm between a rock and a hard place and have an IRS hammer hanging over my head. I am not asking for legal advice...just opinions on what I should do. Could you please go to my most recent thread and check this out?


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Tax liens are a bitch and a half because there is little that can be done about them. They are not "debt" as defined in the FDCPA so collectors don't have to follow the FDCPA at all in such cases.

The IRS gets first dibbs on anything you have as far as assets go, so judgments for consumer debt are likely to get pushed aside. I wish I had something more for you on this, but I don't know anyone at the IRS that could help. My uncle is an auditor, not a recovery specialist for the IRS.

One thing does occur to me though. I seem to recall one piece of law that was signed in under President Clinton (one of his few good deeds) that said the IRS can't go after you unless they audit you within 24 months. This does not count in cases where a person commits fraud, just when it's a bonafide error.

It was called the "IRS Restructuring and Reform Act of 1998" and here are a few of the changes that may apply to you:

Restricting the use of “lifestyle audits” by the IRS

One of the most intrusive, time consuming and abusive audit methods used by the IRS is the “lifestyle audit” - formerly known as an “economic reality audit”. When an IRS auditor suspects that a taxpayer has significant unreported income, the auditor resorts to a detailed analysis of the taxpayer’s lifestyle (spending habits) in order to compute how much income would be required to support the lifestyle. If the computed income is more than the reported income, the IRS presumes that the taxpayer has failed to report all of his or her income.

To counter that kind of allegation, the taxpayer is required to use a detailed cash receipts and disbursements and balance sheet from year to year to establish that any excess “income” can be accounted for via gifts, inheritances, the consumption of assets or the assumption of added debt.

Taxpayer representatives have complained that many agents are using this audit technique at the beginning of an audit and without any basis for suspecting any unreported income. Further, many agents have taken the position that this type of audit requires them to deal directly with the taxpayer, and to visually inspect the taxpayer’s home and style of living. That has precluded the taxpayer from using a representative in dealing with the IRS. The new law prohibits the IRS from using this audit technique to determine the existence of any unreported income unless they can establish a reasonable indication of such unreported income by other methods.

By the way. If any IRS agent attempts to gather information about your lifestyle, I would encourage you to get help from a lawyer who specializes in taxpayer defense work. Either the IRS agents will be ignoring the new law or will have established a “reasonable indication” that you have failed to report all of your income. If they pursue that course, that means they are probably looking for criminal sanctions.

More Flexibility in the offer-in-compromise program

An offer-in-compromise or an installment payment arrangement for back taxes is generally available to taxpayers who do not have the assets or income necessary to pay the taxes due. In general, the IRS has been somewhat inflexible in applying it’s rules with regard to such arrangements. The new law requires the IRS to be more flexible in the application of certain rules. In addition, some prior IRS procedures are no longer permitted as a matter of law. While the changes in this area are not dramatic, they should result in fewer hardships for more taxpayers

Partial relief from tax liens and levies

Some of the worst abuses of taxpayers arise from the power of the IRS collection employees to apply liens and levies on the income and property of a taxpayer without court approval. The new law introduces some modest improvements in a variety of the rules that apply to the use of liens and levies by the IRS. Even so, the changes are not so great as to prohibit the IRS from “getting the money” from reluctant taxpayers. For example, the law now requires supervisory approval before a revenue officer can commence collection efforts by lien or levy, starting on the date of enactment of the new law. However, the automated lien and levy system produces most of the problems and isn’t subject to any review or approval process until after 2001. But, the enhanced role of the new National Taxpayer Advocate will give taxpayers a source of redress if a lien or levy would result in a hardship on them.

Creating a new Taxpayer Advocate position in the IRS

The Congress has made numerous attempts to create some kind of agency that will serve as impartial arbiters between taxpayers and the IRS. However, until now, the IRS has successfully argued that putting such a function outside the IRS would diminish their ability to collect the taxes that are due. This time, an independent National Committee on Restructuring the IRS was appointed to study the issue in relation to the ongoing incidents of taxpayer abuse by IRS agents. The committee persuaded the Congress to remove the Taxpayer Advocate from appointment by the IRS Commissioner. A number of other significant changes have been set forth in the new law to provide that the National Taxpayer Advocate (NTA) be appointed by the Treasury Secretary with consultation by the IRS Commissioner and the new IRS Oversight Board (discussed next.) In addition, the new law provides for an independent career path for employees of the NTA and for removing the local taxpayer advocates from control by the local District Directors. This restructuring bill offers the most sweeping and meaningful change of the taxpayer advocate position since the introduction of the Taxpayer Ombudsman in 1979. In conjunction with the new oversight board, aggrieved taxpayers should now have some meaningful recourse from overzealous agents or mindless IRS computer systems.

The law also gives you the ability to sue the IRS for up to $1million in actual damages due to the willful and reckless behavior of an IRS recovery officer. Sorry no punitive or statutory damages here and they get off the hook for bonafide error.

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I so appreciate the time and effort put in to your response. Our situation with the IRS has been so stressful. Our financial situation is pretty tight, but we have managed to pretty much keep up with our current debt and tax load. The main problem is that our living conditions are pretty primitive :oops: ...I cook on a two burner hotplate, heat water for bathes and dishes which I wash in plastic tubs, because there is no sink in the room that serves as our kitchen. We take our baths out of a five gallon bucket. In fact, the only thing with plumbing in our home is the toilet. We've lived like this for 6 years this month, trying to just keep a roof over our heads and rebuild from DH's bankruptcy, making huge sacrifices in order to hopefully have a brighter future. Instead, it looks like we are going to have to live like this for another 10 years, if this poor old mobile home doesn't collapse around us. And heck yeah, it's been totally embarrassing living like this. I never invite people over.

We filed our first Offer In Compromise app. back in '02, offering 20% of the value of our assets. We got turned down because we weren't current on our quarterlies. We've refiled 3 other time, the last time we were charged $300.00 in fees to apply. They've returned our offers for a variety of reasons, such as not filing all applicable forms (not true)...they insist that we must be bringing in more than we are reporting from my hobby which is growing and selling plants at the local farmers market. I made $115.00 last year at the farmers market. They have never sent anyone out to verify our living conditions, and even tho they have a letter in hand that it is imperative I seek a specialist for my disease, they still decided we could afford to make payments fo $108. until Aug of 2014. the payments don't even cover the interest accruing, but never the less... it makes no difference to them that we are living like in substandard housing or the fact that I need more thorough medical treatment.

The taxpayer advocate who was assigned to our last OIC was the one who set up this payment plan. She seemed more interested in making sure that the IRS was satisfied than in helping us to resolve our issues. I called her about the fact that I'd been contacted by a CA about an old student loan and could we count payments for this as a valid expense. Nope... it's not an expense that is vital towards my to earning an income. She also never came out to see how we are living. We are waiting for a "Collection Due Process" hearing to appeal this latest denial, but I don't have alot of hope for relief.

All the work I've done for the last 1 1/2 years to clean up our CR's is going down the tubes and it's breaking my heart, not to mention very nearly breaking my spirit. And along comes this jerk CA trying to take advantage of me. It's not often when I get a plum dropped in my lap, and if I weren't pressed for time with the tax deadline coming up I would relish every step towards annhilating this CA. I hate feeling like I'm being selfish worrying about my own problems when there are others out there that this CA is doing the same things with! So folks, if you were living in my shoes, what would you do? Personally I'm beginning to think it would just be easier to take a 45 caliber sleeping pill. And I can see how pathetic that statement sounds, but I'm just at the end of my rope!

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Follow the advice you get here and just keep pluggin away. You have to believe things will get better. One day you will look back and be glad that you put all this work in. Don't give up. One day you can help people that are in the situation you are in right now. Don't let them break you. You will prevail. Keep your chin up and think of those who love you. I'll be thinking and praying for you.

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Have you talked to your Congressional Representitives? You would be surprised how high and fast goverment agencies jump when they get an inquiry from a congressmen.

For dire situations it is best to visit the local offices and meet with their aide and bring visual aides along.

My next door neighbor had a stroke last year and has had heart issues for years thanks to his exposure to agent orange in veitnam. For over 6 months his review of disability rating sat in someones box at the VA. After loosing the records from his Dr documenting his case twice they told him it was going to take another 6 to 9 months to finish the reveiw AFTER they got the records they need and determine if his disability rating would be raised from 30% to 100%. Since he can no longer work, he lost his business and he and his wife were struggling to get by and getting further behind.

I took him to the local office of our Senator and we talked with her Aide for a while and showed him pictures of rain damage to their house that they could not fix due to limited income. He say first hand the speech and motor function problems he was having and heard how they had cut off his Physical Therapy.

The VA called them within 48 hours to let them know they were fast tracking his review and 6 weeks later they mailed them a big fat check for back disability pay from the date of his stoke.

About the only person that gets these guys moving faster is a call from the White House.

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First of all, I'd like to apologize for the self indulgence. This last year really sucked. On top of our crappy living environment, my crappy health, and all the fighting with the IRS, my mom passed away last April, and the anniversary of that sad day is close at had. Then my youngest brother was brutally tortured and murdered on Thanksgiving night when some guys broke into his apartment to rob him. Now this student loan thing has come up. I've been fighting a major case of depression and not being very successful. Two years ago, I'd have never made a statement like that. :(

Anyway, yeah, I wrote our local congressman, including photos of our home and the letter from a doctor I saw in January, who my cousin paid for. I have Hep C with a viral count of over 721 million/iu. For those who don't understand what that means... if I don't get medical help soon, I will die in alot of pain. (Aint that a happy prospect...) IRS says get on disability. Tried to get in to see a doctor last week...don't have the money for the first office visit. Anyway, the congressman wrote me a really nice letter back and asked us to sign a release so he could get the IRS to open our file to him. Two weeks later, he referred our case to the taxpayer advocates office. I was thinking "Yipee! Now we might get this thing accepted". Pooey! Fat lot of good the Congresman and the taxpayer advocates office did.

So we signed the installment plan with the IRS and were told that they'd leave us alone for 2 years, until time to review our income again. I thought great! A little breathing room. And out of left field, wham!!! this CA contacts me on the old student loan. I've talked to the original creditor and have been directed to the Direct loan program, and I'm waiting on them to call me back. I've still got to deal with this violation situation.

This is what is tearing me up. I've come to agree with the opinion that it is our responsibility to prosecute predatory CA's, not entirely for our own gain, but to stop them from using their tactics on those who are less informed. On the other hand, I'm desperate for enough cash to pay the quarterlies coming up. If I threaten to sue, I could maybe get enough to cover taxes and see a doctor and pay for some much needed home repairs..."within 10 days". But if I just go ahead and sue, the payoff would be bigger for me and more severe for the CA, but it will take months to finalize. So it's a choice of doing what is right for me, or doing what is right for everyone else this CA is doing this to. Either way, the stress is just about to overwhelm me again.

Coming here has always given me somewhere to hide out from my problems for a while. Reading everyones threads, learning lots of good information, even helping out with my experience now and then. I've even been giving free classes at the local community center on budgeting and do it yourself credit repair. Had to cancel last nights class tho because I'm tired (chronic fatigue) and sick.

Anyway, if ya'll were me, what $$ would you demand of this CA in an ITS?

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I think I would demand 5 grand to begin with.

You know in your situation...I think I would contact the local news media. You have tried the congressman and that did no good.. Now you are dealing with someone telling you to commit fraud on top of all these othr things.

Let the TV channel come see how you live.. let them contact the IRS and make them look like the bastages that they are

You need to also check into every single type iof Govt assistance that there is. FoodStamps, Medicaid, TANF if you have kids... EVERYTHING.

You are paying taxes and that is YOUR tax money that you are entitled to just as much as the next person .

You do not have to have doctors reports to file for disability. How did you find out you have Hep C.. you have been to a doctor at one time.. use that info to get the case started.

I know life is rough but the best way to beat it is to find out every little tid bit of information you can. Call your local county or city trustee and see if they have any hardship help cases.

Don't you have a clinic that you can seek medical help based on need?

Let us know how things are going and NEVER EVER GIVE UP HOPE!!!!!

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Also you can check with the local bar association to see if there is a lawyer in your area that will take your case pro-bono (free). Lawyers need tax breaks too, and many of them do some free work on the side for those in serious need in order to get a write-off.

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Tropicaljo, I really do feel for you.

I am in Kansas and the state has a couple of programs, that if your state has them you would definately qualify for assistance.

search teh web

Weatherization grant, spend up to 5,000 on your home to improve,

we got new furnace, insulation, all kinds of little things to make the home better.

Kansas also has emergency repair program

spend up to 5,000 for major repairs, we are getting new sewer ssytem, this summer.

both of these grants/programs are run by teh South Central Economical Developement District (SCKEDD) out of wichita, KS they do send people out to see your condiditons.

so if your state has similar programs I hope this puts you onto them.

Our house desparately needed a new roof, so this group helped up find $ for it. We needed to use the Emergency repair program for teh sewer as is was the most expensive, so they contacted the mennonite housing of wichita also and they funded 85% of the cost of the roof.

I found all of these programs thru the web. It was alot of paperwork, but it has kept me from loosing my business and in turn our home.

Our small town does have a non profit group that is thru one of the churches that has helped a couple of my daycare families get their utilities back on, they found out about it thru the local red cross chapter.

I realize these are not CA or CRA or IRS issues directly, but I want to help you in any way I can. I hope this information is useful to you.

if you or anyone else has any questions about some of this stuff pm me.

And Sky is so right get a medical card, food stamps, etc.

USDA has the free school/lunch program and also the wic program.

WIC - women infants and children. usually administered thru your local health department. food vouchers, immunizations, health screenings, etc.

You are in my thoughts and prayers


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I think that having unpaid tax judgments can cause you to be excluded from a lot of public aid programs.

This does not mean that you should not look into it. Do as they suggest and apply. But but just be aware that it may be possible to be denied due to the tax issue.

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Boy, I hadn't thought of alot of that stuff. Thanks for all the suggestions!

Skywarner wrote:

You know in your situation...I think I would contact the local news media. You have tried the congressman and that did no good.. Now you are dealing with someone telling you to commit fraud on top of all these othr things.

Let the TV channel come see how you live.. let them contact the IRS and make them look like the bastages that they are

If I were to consider this option...DH would have a cow...he's worked very hard to establish an image of independance and reliability among his peers, and allowing the media to come down here and film this dump we live in and make it public for all his peers to see? If it were just little old me living here, I'd call them in a heartbeat because at this point I have very little shame left.

Methuss...for which of my issues are you suggesting I seek a pro bono att'y? There are so many to choose from. If your talkin' about this CA violating the FDCPA, I've already explained that I can't find any locally that specialize in FDCPA issues. Disability issues, well, I've been told that I have to be turned down at least once prior to seeking an att'y. :shock:

And rodeomom...bless you for all that info...we live in a mobile home that is approximately 35 years old and as I've described...in horrible condition. The cost of the extensive repairs and improvements would be more than this mobile home is worth, and all those places you suggested would most likely say that the mobile home is unfit to repair.

As for our basic living expenses...after DH's BK, we vowed and have managed to keep up with basic living expenses, only late a couple of times in the past 6 years...utilities and our local creditors all love us cause when we know we're gonna be late we always call ahead. However... DH makes just enough income to exclude us from the medicaid program and foodstamp programs. Besides, our kids are all grown and out on their own. Darn it! They just had to grow up and move out! And how's this for ungrateful...(being flip here) the oldest is doing so good financially that he and his wife blew over $18k last year in Vegas! (the needy side of me wants to rail at him with the obvious responses...the Mom side is so proud that her little chick is doing so well and wouldn't dream of asking the brat for some $$ assistance...)

Anyway...I am grateful to everyone who has responded, and thankful for your thoughts and prayers and kind words of encouragement. It's springtime in the Ozarks and it is going to be a beautiful day...think I'll get out and enjoy it. Ya'll have a GREAT day and wonderful weekend!

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Thanks Methuss. I'll do as you suggest on Monday. I've known we needed a lawyer for a long time to help us with these issues, but hadn't thought of calling the bar association to try to find one who didn't have to have $500 or more up front. I asked the guy who's doing our taxes if he knew a good tax lawyer and he said he did but they were all very expensive. DUH! It is infuriating and depressing when you need help and those that can help you are only interested in the Almighty Buck!!! Everyone I talked to about the offer in compromise (including Jay K. Harris) wanted $2000 (+/-) up front to help us.

There is so much that isn't "right" about my life that when I start talking about it, alot of folks act like they think I'm just reaching for sympathy... that no ones life could be so full of roadblocks and tragedies as mine has been in recent years. I remember a time when I didn't have a single manila file folder in my house. Now, it's like...everywhere I look, theres a file folder containing the details of some kind of legal or financial issue. Gosh! I wish I'd have brought some of this stuff up before. You folks have given me so many suggestions that might help resolve some of this mess! You all have my eternal and humble gratitude.

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