More on Garnishment

Did the OP say the garnishment papers were from the IRS? I lost he original post.

The issuing authority may be sending requests to any/all income sources of the individual/business in question due to the convoluted mess the tax and state agency databases are in. It may be easier to send out the paperwork to everyone instead of trying to determine who should receive it.

=

I don't think so. It was just the other post's follow-ups that prompted me to post about this other situation.

So the likelihood is that it was just a computer generated letter with names harvested from 1099s, that's what I'm getting from what you wrote, is that correct? Is it also correct for me to assume, based on replies in another thread regarding inability to garnish non-employees, that the IRS or state cannot demand that a company garnish its subcontractor? This is just info I'd like to file away.

If the individual is trully an independant contractor then your statement is true.

This is just info

Thanks.

Tara:

Allan isn't a lawyer and I wouldn't rely on his legal advice if I were you.

Think of it this way, the IRS absolutely can go into your bank account and take all the money. They can go to your bank and have the contents of your safety deposit box handed over to them. They can go into your merchant account and take settlements. They can show up at your door with guns and take property. They can evict you and sell your real property. Why can't they grab a check? Of course they can! And they damn well better because it might be headed to an offshore bank where they can't get the money.

The paperwork for taking wages may be different than the paperwork for taking all other payments, but the net effect is the same. The money goes to the government and a receipt goes to the person. No different really than an order to collect from a court case. Just think of what Ron Goldman's lawyers are trying to do to OJ.

Here in California you are required to report independent contractor EIN/SSN's for just such a purpose.

If there is a question about paperwork you have in hand, run -- do not walk -- to your lawyer. He might even tell you that if you have been served with the wrong papers you have a duty to inform the government agency and allow them time to serve you with corrected papers before you can cut payment. Every case is different so that is why you must talk to your lawyer about the specific papers you have in hand.

Gary

P.S. Anyone else hate the newer W-9, the one that requires SSN's not EIN's unless you are a corporation?

I'd think that in the vast majority of cases the money isn't going anywhere but to pay the mortgage, buy gas or food as the likelihood is the IRS already seized the bank account funds.

Why only CA, or rather, why not all of the nation? That's the first I've seen or heard of that form.

I don't have any such paperwork and wasn't involved with my client at the time of this incident so it was just a matter of curiosity. I would certainly speak with one of the attorneys if something serious came up but I also don't see the harm in asking for clarification of an issue here. What's a bit puzzling is the attorney reference in particular here. All of the accountants I've worked with have more legal knowledge regarding the how-tos of business structures and their financial architecture than the attorneys do. The attorneys may be very familiar with all the paperwork & filings but they generally refer out to accountants for answers pertaining to the IRS.

The W-9 revised Jan. 2005? Its my understanding that the inclusion of sole proprietor in the SSN category is there with the assumption that the sp never applied for an EIN under their dba name. For those who have EINs, which do read: John Doe dba XYZ Construction, then the EIN is used on the W-9.

-- Vic Roberts Replace xxx with vdr in e-mail address.

That's not what I meant. I meant, if this works so well for the IRS wrt liens, garnishments & seizures then why hasn't the IRS instituted it across the board? And no, I don't want that to happen.

If the IRS is getting in the funding stream of someone, I'd would bet the IRS thinks that there is fraud afoot. You can bet this person didn't set up a payment schedule or stick to it if they did.

Obviously you don't get the quarterly reporter from the CA EDD, where they spent an entire year reminding all CA employers that the law had changed and reports were now required. Heck they even enclosed a form!

As to why CA and not the rest of the nation, CA is usually a few steps ahead of the rest of the nation in what is fashionable to do, like collect back child support. Or have a higher minimum wage.

For normal tax law questions you are right, most accountants know way more than attorneys do. For court [or administrative] orders to do something, lawyers know more than accountants. The OP wasn't an accountant and did have court orders in hand.

I note that Allan who hadn't even seen the papers in question had a sure fire answer for the OP. I don't know of any lawyer who would give an answer without looking at the papers. If Allan is actually licensed I'm sure he is giving his clients better advice than he dispenses here.

The case I was speaking of is one of a portion of 941 company contributions combined with additional income tax being owed for the prior tax year. Payment schedules were in place and payments made for quarters 1-3 with a portion of Q4 being paid but leaving a balance owed.

No, I'm a bookkeeper in SC so I'm clueless about CA law.

Well I hope the program stays in CA. We have enough subcontractor "gotcha" reporting to do with city/town/county agencies that I'd hate to add the IRS and/or state to the list. Its hard for the small business to make a profit with all the administrative (reporting), insurance and payroll costs (and SET for those non-incs) already in place that it won't be too much longer before the little man can't afford to run a business in the US.

For the first time you are actually making sense. There ain't no Coop Deville on the bottom of a CrakerJacks box.

Because this has not been set up by the IRS but by the State of California.

-- Vic Roberts Replace xxx with vdr in e-mail address.

You need to get out more. The Tenth Amendment has been repealed through non-use (also the 9th). There hasn't been a case decided on either the 9th or 10th in over 150 years. Moribund.