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Back taxes turn into $14,000 debt

I have a problem with the IRS. They originally said I owed back taxes of $250, which I couldn't pay because I had just been in a car accident. Well, because of late penalties and interest added to it every year, that amount has grown to $14,000 and it continues to go up by about $3,000 each year.

I am about to give up in despair. If you know of anyone who can help me, I would be very appreciative.

It started back in 1982 when a friend in Texas offered me a part-time job as a security guard at subdivision construction sites. I was paid under the table. I needed the extra money at the time because of a custody battle with my first wife.

The job became full-time job but I had to give it up the next year because I had never gotten a state security license.

We moved back to Pinellas Park where I went back to driving a truck. My second wife got her GED and went to nursing school. Everything was falling into place when she had gall bladder surgery and her dad got sick. We moved to Massachusetts to be close to him.

About the time he got to feeling better I was involved in an accident. I ended up with a ruptured disc and several complications so that now I am permanently disabled.

Meanwhile my wife finished nursing school, took college courses, and raised four children.

We first heard from the IRS the year of my accident. They said we owed $250 for 1983 taxes. We explained our circumstances, and they said they would hold back any refund due until it was paid up. Well, it didn't work that way.

The next year we got another letter saying we owed approximately $974 plus penalties and interest totaling $1,713 for 1982 plus our 1983 back taxes (including penalties and interest) had built up to $14,612.

We went to the IRS in Massachusetts, andbecause I was handicapped and my wife was the sole support for our family of six, they said we should file for a hardship waiver. We did that. Every year since then the IRS has been taking our federal and state refunds to pay on our back taxes. But then in 1989 the IRS told my wife's employer that they were attaching her pay.

We checked and the IRS said that was a mistake. We refiled a hardship waiver.

The problem is that the penalties and interest have gotten so far out in front that there is no way in this lifetime that I will be able to pay off the debt. And because the IRS has reported me to the credit bureau, I can't apply for a loan to pay them off or get a loan to buy a house.

Do you think there is any hope for me? If you can't help, I'll understand.

Kenneth Guyotte

Response: Your sad story is a good reason for not fooling with the IRS.

We asked Michael Stuckey, managing attorney for Gulfcoast Legal Services about your problem. He offered three suggestions:

Contact the IRS in Tampa. Sit down face to face with an agent and ask if you can work out a settlement. Do not agree to any payment plan that you are not able or willing to live up to. If that doesn't work,

find an attorney with a reputation for having the ear of the IRS and ask that person to intercede for you. Call the St. Petersburg Bar Association, ask for their lawyer referral service and explain why you need an IRS expert. If that doesn't work,

file for bankruptcy, either under Chapter 7 or Chapter 13.

Chapter 7 is essentially a liquidation remedy. You turn over almost all of your property, which is divided among your creditors. In return you are forgiven most of your debts, but not taxes. Under Chapter 13 you develop a plan for repayment of your debts without necessarily having to sell your property.

The bankruptcy judge would require that you work out a repayment plan with the IRS. The judge would determine, for example, that you could repay so much each month at so much interest. If the IRS did not agree to the plan, the judge could use something called "cram down." In short, he could cram the plan down the IRS's throat.

We are told that bankruptcy judges enjoy this part of their jobs.

Good luck and let us know how you fare.

If you have a question for Action, or your own attempts to resolve a consumer complaint have failed, write: Times Action, c/o the City Times, P.O. Box 1121, St. Petersburg 33731, or call your Action number, 893-8171, to leave a recorded request.