Omni Helps Restaurant Owner Recover over $23,000 in Tax Debt
“Gary,” a Kansas restaurant owner, hired Omni in May of 2008 to assist him with his business tax debt. He needed help with a levy that had been issued against all accounts in his name.
Since he was a sole proprietor of his business, the levy attached to all personal accounts. However, his accounts were not his main concern because they contained only a few thousand dollars; he was concerned because the levy was attached to an account worth $23,000 belonging to his ex-wife, “Brenda.” He was still very good friends with Brenda, who had been saving money for over 15 years by living a simple lifestyle and being frugal.
Omni worked quickly to get the levy released, explaining to the Revenue Officer that this was not Gary’s money. The Revenue Officer asked for verification that this was only Brenda’s money – a difficult task since money had been building in the account for 15 years.
An Omni representative spoke to the Group Manager, who agreed with the Revenue Officer and stated that since a portion of that money was in the account while they were married, it was technically Bernie’s money. The IRS claimed that since Gary was a signer on the account and was able to access the money, that they had a right to levy it. Before the decision could be appealed, the IRS took the levied money.
Omni began to gather documentation to file a wrongful levy claim and a claim with Taxpayer Advocate. Amazingly, Brenda had saved all of her bank statements and cancelled checks from 15 years ago when she opened the account. After reviewing of the bank statements, it was clear that she was the only one who had ever used the account, as she literally saved part of ever paycheck to build the account from $2,000 to $23,000.
Omni also convinced Gary to go to a local attorney and ask him to review the joint tenancy laws in his state. This lawyer wrote a letter citing case law that stated a creditor garnishment on a joint account severs the joint tenancy nature of the account, presuming that one-half is owned by each joint tenant. If one of the joint tenants were to disagree that one-half was owned by the other, they would just need to prove this by tracing the use of the bank account. By tracing bank statements, Omni proved that Brenda’s independent assets and earnings were the source of the funds in the account.
Omni submitted the documentation along with affidavits from both Brenda and Gary to the Administrative Wrongful Levy Claim department as well as Taxpayer Advocates office. After exchanging documents with technical services and the Taxpayer Advocate, Omni began to approach the nine month deadline for Brenda to file a claim in Tax Court in regards to a wrongful levy. At that point, Omni had approval from Technical Services to return all the money, but learned that it may be another 30 days before the manager would approve it. A few days later, the Taxpayer Advocate made the final decision that they would be refunding all of Brenda’s money to her in the amount of $23,563.57.
Contact us today to learn how the professionals at Omni Financial can help relieve your tax debt.
