Bill Fritton: In any case where you owe the IRS money, they are going to send you a series of letters that basically build up to you need to act now or else. What happens is is eventually the IRS will just get fed up, and because they have your W2s or because you pay electronically your 941 taxes, they know where you bank. It’s very easy for them to send a garnishment to your bank or to your work, and in many cases, if you’re a government contractor or something like that, very easy for them to take your receivables, as well. Then it just starts the cycle all over again. It makes the cycle even worse because now they’ve taken any means you have to pay your taxes, and in the case of an individual, pay your mortgage, medical bills, car payments, whatever.
What we would do is we go into the IRS immediately in a case like that. You’d sign a power of attorney. We go contact them immediately and figure out exactly what it is they need to get the garnishment released. Most times, the IRS is going to be very happy to hear from us because now they know the problem’s being addressed. We’ve been around long enough that we know how to get things addressed quickly and efficiently. If we say we’re going to do something, it’s going to get done, so that they have a level of trust that they can work with us to resolve the problem and don’t have to worry about doing anything that’s going to put their jobs in jeopardy because we didn’t do what we said we were going to do.
In order to get a garnishment removed, the only way to do that is if you hire somebody who has a valid power of attorney that can go in and actually speak to the IRS on your behalf, which we get from everyone of our clients. I’ve had bank garnishments, payroll garnishments released in as little as a couple hours. Liens are different than garnishments. Liens are more or less a judgment. It’s a notice to your creditors and to others that you owe a debt to the IRS or state tax [inaudible 00:01:55]. A lien can cause numerous problems. Number one, it affects your credit. If you’re trying to get a low interest rate loan, that’s going to be nearly impossible with a lien on your record. If you’re trying to buy a house, it’s going to be impossible unless that lien is dealt with. If you are in an area where people work for the government, if you’re trying to get security clearance, that causes a big problem. Any job involving security clearance, a lien is going to be a red flag on that security clearance.
By law, a lien needs to be removed within 30 days after the taxes are paid or if the statute of limitations runs out, which is 10 years on most tax liens. It has to be released within 30 days by law. However, the IRS has recently come out with some new procedures where you can actually have a lien withdrawn under special circumstances if you set up a payment plan that takes care of the taxes within a specified amount of time and the tax lien is under a specified amount. You can actually go in and request to have that lien actually withdrawn, which is much better than having the lien released because withdrawn lien on your credit report will show that it was filed in error, whereas a regular lean shows that it wasn’t an error, you owed the money, and you just paid it or whatever, you resolved it in another matter.