IRS Wage Garnish

[ILLMAS]

TP employer was sent an IRS wage garnishment for 2006 in 2009, in 2010 he filed his 2007, 2008 and 2009 returns which had a refund due to him. Surprisingly he received 3 refund checks which he returned back to the IRS to apply to his 2006 balance. Fast forward to 2011, IRS claims they never received the returned refund checks and that the checks were never cleared either, just wondering why the IRS didn't apply 2007-2009 refund to his 2006 in the first place? I'm I missing something here? Is the wage garnishment similar to a installment agreement once the TP employer starts sending payments therefore it's independent from other years?

Thanks

MAS

[JohnH]

Why do people ever return checks to IRS? They just set themseves up for trouble of this type.

The small amount of interest involved in depositing the IRS payment and then immediately writing a check back to IRS is more than offset by the convenience of having ironclad proof of what took place. This client is learning this lesson the hard way,

[jainen]

>>the checks were never cleared<<

Get the checks re-issued. Have the client deposit them and write a personal check to apply for 2006. At the same time, now that taxpayer is current set up a payment plan and stop the garnishment. This is a good off-season engagement--pretty easy for you, impossible for the client.