NC Garnishment

[erchess]

I have a client who was being garnished by the IRS and NC when it hit her that she needed help and she hired me to assist her. There's no question in my mind that she owes and can eventually pay the taxes involved so naturally I started to think Installment Agreement. Well I found that the IRS is very amenable and of course they were taking most of her pay and leaving her with a residual that I don't think anyone seriously claims she could live on but now she has an Agreement and all is well. NC on the other hand was taking only ten percent and the representative told me they will not settle for less. Thus they won't do an IA once garnishment has commenced. Can anyone tell me whether I ran into a rogue agent or this is truly the policy of the NCDOR? I'm also curious as to whether they would agree to an IA if she quit or was fired or would they simply wait until she was employed again or perhaps look to her assets which in this case are limited to a bank with rarely more than one paycheck in it and an older car? I wouldn't advise her to quit and if she did quit or got fired I would advise her to tell NCDOR about her new job or Unemployment Insurance or other income. I'm simply curious about how ironclad the rule "Once garnishment has commenced there are no IAs" really is.

[Corduroy Frog]

Probably SOL

Erchess, I doubt this is NC law. However, I expect the NCDOR is empowered to do anything they want. Many states limit the ability of a creditor to totally plunder a check, but those limitations are thrown out the window when these states themselves collect the money.

Not a NC resident, but after being involved in 3 different states, I can almost promise you the only relief possible is if you (or your client) knows someone politically connected in Raleigh.

I would also look at the amount owed, and whether 10% is not a good idea to get this paid off anyway. This client should have come to you for help before any of this started, and my guess is she didn't have the fortitude to meet her problems head-on.

One way for her to have relief is to lower her payments. Another way for her to have TOTAL relief is to pay it off quicker. 10% isn't much when you consider their alternatives include a levy on the bank account which will bounce checks from Elizabeth City to Bat Cave.

[JohnH]

I've always found NC to be much more difficult to deal with than IRS when it comes to unpaid taxes. I've encountered a few rare situations in which they were reasonable, but not many.

Given the current budget situation, I suspect NCDOR is telling their collections people to "get tough". After all, our budget situation is clearly the fault of the irresponsible, lazy taxpayers - they just won't earn & spend enough to keep the money flowing into the state coffers. There's just no way that free-spending politicians have anything to do with causing the current mess.

(Ron: Give the time of year, I'd say it would be more appropriate for the checks to bounce from Kill Devil Hills to Bat Cave)

[Edsel]

NC Shortfalls

John, isn't 2008 the year NC began giving EIC at the state level? And now they wonder why they're running out of money.

A shame lawmakers can't live with the mess they create. And even when the mess is found out to be caused by them, there is enough finger-pointing that they still manage to smile in front of the TV cameras.

When you get sick of it all, you can come to Alabama or Tennessee - no poverty, well-manicured lawns, and honest politicians. On second thought - better stay where you are.