Posts by ruggedmaker2

Ryan Brooks3 said:Hey everyone, I could use some help here because this whole situation is a bit of a mess—I'm honestly pretty confused: I have this German supplier that’s also an affiliate, and they're sending me invoices for goods, but some say 'reverse charge' while others claim 'intracommunity delivery - exempt from VAT.' To make matters worse, they even sent over an invoice for shipping those goods from Germany to the US, and that one also says 'intracommunity delivery - exempt from VAT.'
The whole 'intracommunity' thing is what's tripping me up—when I'm booking these invoices, am I supposed to be reporting input tax and the reverse charge obligation?

Yep.

I’ve been digging everywhere for an official word on this, but honestly? I’ve come up totally empty. I can't tell if I'm just looking in all the wrong places or if there really isn't one out there yet.
Even the folks over at the RRIF mention they're still waiting on some guidance. So yeah, I'm officially stumped. 🤷

wearyviper19 said:Hi there,

Sorry to just jump in like this, but I was hoping someone could weigh in on a situation I'm dealing with. I'll be honest, I don't really know my way around legal procedures or enforcement actions, so any insight would be appreciated.

Here’s the deal... my father ended up owing Optima about $900. He received a formal notice from a notary last February. We reached out to them back in May and managed to work out a settlement where we'd pay off the debt in six installments of $150 each, sent directly to their account (the enforcement order hadn't hit the IRS yet at that point). We followed through on that, but we're currently stuck on one final installment that hasn't been paid because of a temporary shortage of funds. The last successful payment went out in October. A few days ago, my father checked with the IRS—his accounts were already frozen due to an existing debt with another bank—and he saw that an enforcement order from Optima had been filed for $1467. Is it actually possible for a debt to jump from 450 to $1467? I'm wondering if this might be an error on their end, considering we've already cleared five of the installments (I have all the payment receipts saved). I realize notary fees can be pretty steep. If this turns out to be a mistake, is there any way to have the order pulled from the IRS so we can just settle that last remaining payment?

Thanks in advance,

Did you ever tell the notary about the installment agreement you made? And did you send them copies of those payment receipts?
Have you filed an official dispute against this $1467 garnishment?

It’s totally possible that Optima never told the notary anything, so as far as they're concerned, nothing has happened. Pick up the phone and start calling both Optima and the notary.

Look, you set up a protected account specifically for income that qualifies—you can check the IRS website to see exactly which types of payments count.
Just a heads-up though: if some other individual tries to wire you money, that doesn't count as protected income, so it won't go into that specific account.
Unless, of course, they've gone and changed everything with these latest legal amendments. 🤷

First things first, you’ve gotta figure out exactly what’s hitting the invoice. Are we talking raw goods, a straight service, or maybe a product that comes with installation? Once you settle on that, you can nail down where the delivery is actually going.
Come on, give us some specifics here. Maybe we can actually be useful if you tell us what's really going on.

rowdyraven112 said:I was a witness to this working. I saw a lady work things out with a Law Firm XY to agree to an administrative withholding on her salary just so they wouldn't freeze her checking account. There wasn't even an active execution yet—nothing had been filed. She went down to the IRS and got into a massive argument with the clerks who were claiming exactly what you two are saying. But look, the law clearly states you can't seize certain parts of a paycheck (depending on the pay grade), and it’s the debtor's job to notify the IRS about funds that are legally exempt from seizure. What if she had a levy hit her checking account while a withholding was already set on her wages? The IRS and the bank don't cross-reference anything; they just execute orders. (I know, it's hard to explain how messy this is). After arguing with the clerks and finally getting a legal specialist from the IRS called in, the lady pulled out a document proving the withholding was set, that a third of her income was already being diverted, and that she had notified the agency about her exempt earnings. Me and some other guy standing there signed off on it. She even asked if we'd be willing to sign it before a notary. Eventually, the legal advisor stepped back to consult a supervisor, came back, and told the staff to open the protected account for her. Bottom line: legal interpretations say one thing, but reality is often something else entirely.

The law says so, plain and simple. But everyone here forgets one thing: an execution is a risk for the creditor. There's always a chance they won't collect anything. A creditor will accept whatever the debtor demands if they actually want to see any money. If they don't care about collecting, they take the risk. That’s why I give people advice on how to handle it.
As if screwing over the creditor is some kind of science. We see examples of pre-settlement negotiations and fake invoices all the time. Is it hard to make up a fake loan agreement for, say, ten thousand dollars and immediately trigger an administrative freeze on assets and a third of a paycheck? (We've touched on this before, but it hasn't been explained properly). Not at all. A notary just verifies the signature. People even get divorced on purpose just so child support—which gets priority—can be collected. People sign documents claiming a parent abandoned them or failed to meet obligations. One interesting legal loophole: the statute of limitations resets whenever the debtor acknowledges the debt. So, a parent signs a paper admitting they owe child support for the next 20 years of a kid's life. Sure, it's shady, maybe even an abuse of rights, but you have to prove it in court, right? You bring in a neighbor as a witness who swears, "Oh, he's a saint, and she's just being difficult," and suddenly your whole case collapses like a house of cards.
The reality is that uncollectible executions are increasing because once people get over the initial shock, they realize how to game a system that was designed to crush them. That's exactly why banks offer settlements for just the principal amount.
I always aim for a fair relationship between creditor and debtor. A person owes money, and they should pay it. But not in a way that lets them get robbed. Based on that, I give the advice I give here on the forum.

From what I can gather, the gentleman isn't facing an actual execution yet; he just got a warning notice. Until an execution is officially ordered, he can and should dispose of his property however he likes. Even during an execution process, if the creditor specified a garnishment of wages or bank accounts, he can still manage his other assets however he wants.

Honestly, here is what I would do if I were him. Since there is no execution yet, everything is legally clean regarding transferring assets. I'd gift the property to a minor or quickly sell off excess real estate. I’d sign a fake loan agreement for ten thousand dollars with someone close to me. After a week, I’d sign a document acknowledging the restriction on disposing of property and wait like a coiled spring. Then, I’d head to a Law Firm XY to negotiate. If they grill me too hard, I’ll just walk over to the bank's legal department, explain the situation, and offer an installment plan for the principal and legal fees. We’d wrap it all up in a formal contract, of course.

But there *is* an execution. 😉
That "administrative hold" thing? That's still an execution. It's just a garnishment where the debtor gives their consent.
In that lady's case, they were only hitting her wages (meaning her employer handles it), rather than seizing everything she owns (which is what the IRS does to every single account you have).
Both versions—the wage garnishment and the total asset seizure—are governed by the Enforcement Law.

Look, I don't have a perfect answer for you, but I've been through my own nightmare with a lost acquisition invoice 🙂

Back in the day, I wasn't even registered for sales tax, but I accidentally included an acquisition invoice on one of our filings.
The actual invoice never hit my desk, and neither did the shipping manifest. Honestly, I had zero clue we’d even made an acquisition from Austria.
I didn't hear a peep about it 😁 until the IRS called me up to tell me there was a discrepancy in the books.
See, our supplier reported it, but we hadn't... and somewhere deep in the tangled mess of European Union bureaucracy, they realized the numbers didn't match (whatever that means), so they flagged our local tax office. They called me, and I had to scramble to fix all the sales tax forms.
(And of course, I was tearing the office apart looking for that damn manifest and invoice... eventually found them buried in some random folder at the accountant's desk. 😁 )

But in my case, it had only been maybe two or three months, everything fell within the same fiscal year, and the IRS actually reached out to give me a heads-up.
But if you're sitting on an acquisition invoice from 2013 that just showed up now, and the IRS hasn't come knocking... 🤷

rowdyraven112 said:Anyone can open a protected checking account whenever they want. It doesn't matter if there’s actually any threat of being sued or garnished. You just send a letter to your employer and reroute two-thirds of your paycheck straight into it immediately. Simple.
If you're facing any kind of garnishment, opening a new account isn't some luxury—it’s a necessity. It's pure prevention. The IRS and your bank don't give a damn about the law or whether they're only supposed to take a third or half of your paycheck. If even one cent hits that frozen account? They'll grab the entire damn thing.
Based on what I’ve seen from everyone posting here, getting back funds that should have been exempt from execution comes down to one thing: whether the creditor actually feels like being a decent human being. It’s entirely up to their good will. Honestly, I haven't run into anyone who actually sued the bank, the IRS, or the creditor for violating the enforcement law—you know, when they seize an entire paycheck or funds that are legally protected. Why? Mostly because people are too broke to afford a lawsuit, and frankly, most lawyers won't even touch it because there's no money in it for them. Is it worth it? Probably not. 😉

Dead wrong!
You can open a protected account before a garnishment actually hits, sure, but only if you provide the paperwork proving that an execution is actually imminent.

Article 22.

(1) Under Section 212, Paragraph 1 of the enforcement law, the debtor is required to notify the IRS regarding any incoming payments or benefits listed under Section 172, or any amounts exempt from garnishment under Section 173, when dealing with fund seizures.

(2) If the IRS receives the notice mentioned in Paragraph 1 and finds nothing recorded in the registry as a legal basis for payment, they will accept that notice provided the debtor attaches a copy of the underlying documentation showing that a specific garnishment on their funds has been ordered.

Not sure where this belongs, but maybe someone here could actually use it. It’s pretty straightforward enough:
When the tax liability kicks in

I guess we'll just have to wait and see if those upcoming changes to the Value Added Tax Act actually change anything for us—fingers crossed, I suppose. 😁

If you're buying a car from just some guy on Craigslist, I doubt he’s even registered for sales tax. 🤷 I mean, I'm pretty sure there's no tax involved in a private sale like that.
But take a look at this:
http://www.irs.gov/tax-topics/sales-tax-regulations...06.2013.pdf

http://www.irs.gov/tax-topics/sales-tax-guidelines...aspx?id=18690

Michael Kern56 said:I’m trying to figure out how to dodge the sales tax when I buy stuff through eBay from a vendor based in another state. My plan is to have the seller include an invoice showing my business tax ID, clearly splitting the net price from the tax amount. I'd pay them via PayPal using my personal account, then just reimburse myself from my business checking account later.

Look, if the seller lists the sales tax on the invoice, you end up paying it to them. Then, you have to go through the whole headache of filing for a refund through the IRS: http://www.irs.gov/sales-tax-refund-info
Everything you need to know is right there.

Now, if the seller doesn't list their own sales tax because they're passing the tax obligation over to you—which happens—then your business handles both the tax owed and the input credit at the same time. You report it on your tax forms and your acquisition filings. We actually covered this earlier in this thread, so maybe scroll up and give it a read.
(Assuming you're registered for sales tax, anyway.)

David Green642 said:Thanks! So, if I'm looking at an incoming invoice for, say, a bed purchased within the UN, I check the applicable US tax rate because it's a transfer of tax liability—so it's 25% here, and I stick to that?

I get the rest...

That whole "transfer of tax liability" phrase trips me up a bit. Sometimes it's listed on invoices and sometimes it isn't—is it actually required to be stated? I'm talking about invoices for goods acquired within the UN, obviously.

🙂

You've got the right idea. If you buy a bed from a registered business in another state, that item is taxed here in the US based on our local rates. Since the tax burden is shifted to you, your business owes the tax but also gets the credit simultaneously.
As for how that "tax transfer" language appears on the receipt, that depends entirely on the specific state laws where the seller is located.
Foreign buyers write their invoices according to their own state's rules. They might use a full sentence citing their specific state code, or something vague like "tax-exempt delivery"... it all just depends on whatever their local laws dictate.

David Green642 said:One question on this process: if I enter the bill the way you described, do I list the amount as non-taxable, or do I break it down by tax rate? I assume I should break it down by rate so the total tax liability/credit calculates correctly. But what rate am I using? Is it 8%? 10%? What does that depend on? Does it depend on whatever is on the invoice based on US state laws, or...? 😍

Look, if we're talking about a reverse charge situation, then the tax liability is being shifted directly onto you as the buyer. 😉
Basically, you're acquiring the goods at the applicable rate—which is whatever the US tax code dictates for what you're actually buying, since I don't know your specific business niche—while simultaneously claiming the right to input tax credits. You're essentially handling an intra-USA acquisition and the corresponding input credit at that specific rate. (So, if it's a 25% rate, that info goes straight into sections II.7 and III.7 of your tax forms), and then you file your sales tax returns.

Honestly, just head over to the IRS website. They have the full tax code and regulations posted there, along with a massive pile of official opinions and FAQs. It'll tell you exactly what applies to your specific situation. They also provide incredibly detailed instructions on how to fill out the various tax forms. It tells you step-by-step exactly where every single number goes. 😉

Look, you aren't actually losing any cash on that sales tax during an acquisition because you’ve got the tax liability and the input credit hitting your books at the exact same time. It just cancels itself out. 😉

As for the paperwork, you gotta file your sales tax returns by the 20th of the month for the previous one, but if you actually owe the IRS anything, you’ve got until the end of the month to cough up the payment.

Look, if there’s no sales tax listed on the invoice, it means the tax liability has been shifted onto you. That means you’re on the hook for the tax itself, but you also get the benefit of claiming it as an input credit.
You report that sales tax in your quarterly filings under sections II. 10. and III. 10., plus in the standard sales tax return form

Here’s the guide for the sales tax return

You can find the rest of the instructions right here:
http://www.irs.gov/sales-tax-guidelines

I’m not entirely sure how this works for individual freelancers, but if you’re running an LLC, you’ve gotta book all of this in your formal financial accounting.
Invoice: 4.... / 221...
Sales tax: 1... input credit / 2... sales tax payable (honestly, I don't know which chart of accounts you're using)

You clear out the vendor account once you pay them. As for the input credit in account 1 and the tax payable in account 2, you clear those out using a journal entry at the same time you file your monthly tax return. Basically, by clearing those class 1 and 2 accounts, you’re either showing what you owe the government or showing a credit if you overpaid.
Then, when you actually pay that amount or when the IRS sends you a refund, you clear that obligation or credit using your bank statement as the basis—either when they cut you a check or when they apply it to your account.
If you just show a credit on your return but don't actually ask for a refund or a direct transfer—maybe you just want to leave it as a prepayment—then you just let it sit in the appropriate class 1 account until you actually use it.

Look, if you still owe some sales tax from the last filing and haven't settled up by the time you're turning in this new one, just list that debt under section V (just the principal, don't bother with interest). On the flip side, if you actually overpaid and requested a refund or a credit, that's currently stuck in limbo because the IRS moves at the speed of a snail 😁, so you leave section V blank.

Basically, column V is where you put the actual reality of the situation... if your last filing showed you either owed money or had a credit, and nothing has changed since then—meaning you haven't paid up yet or hasn't been processed for a credit—then you just carry that exact same number over to section V on the next form.

Those internal ledger cards can really throw a wrench in things because: - they include late fees and interest which aren't part of the sales tax calculation
- they're never quite up to date when you're doing credits or refunds (sometimes you're waiting days for the system to reflect reality)

Honestly, I don't get why the IRS makes this so confusing for people. Shouldn't they be more focused on what's listed under section IV? Most of the time, their own automated systems are doing all the heavy lifting anyway.

Nicole Lee6 said:I was looking into this myself and honestly, it's incredibly confusing. It seems they want us pulling data directly from the previous month's filing rather than just checking our internal ledger or tax credit accounts.

For instance, back in March, I had a $300 refund that I applied as a credit toward future payments.
Then in April, I had a total tax liability of $67, which left me with an outstanding credit of $233 on my books.

Based on these new instructions, it looks like for my May filing, I’m supposed to increase my monthly liability by $67 based on what was reported in April. But in reality, I’m actually sitting on a credit balance. I have absolutely no idea how they expect this to work in practice without everything getting completely skewed. 🤷

Actually, it kind of makes sense to me. Look, if you owe sales tax but you’re broke and don't pay, the IRS ledger automatically shows a balance plus late fees, right? But those penalties don't go on your tax form. You just report the actual state of your own accounting books and call it a day.
I never used the IRS ledger balance anyway; I always just used the balance from my general ledger accounts depending on whether it was a refund or a liability.

If there were any late fees, I’d just clear them against the IRS ledger when I did year-end closing on December 31st—you know, during that whole asset and liability inventory we have to do per the Sarbanes-Oxley Act.

The way the Sales Tax ID works is basically just the state code plus the number itself. As for whether your software can automatically pull the state designation based on the business partner's address 🤷, I guess that really depends on what kind of system you're running. You’ll have to give it a spin and see if it actually works.

I’m honestly losing my mind over this activity code listed on the notice of classification according to NKD. All I can see on the notice is the numerical code, but there are zero letter designations anywhere to be found. 🤷 It turns out the quota for hiring people with disabilities depends entirely on those specific letters, but in my case, there isn't a single one listed. 😕
Am I just looking at this completely wrong?
The more I dig into this nonsense, the less sense it makes. 🙂

Sam Wright21 said:Hah! If only reality worked that way. My own account was frozen back in December 2013 due to some court fees I paid in September 2013. To this very day, it remains locked because nobody can seem to figure out which department is actually responsible for unfreezing it. It isn't "as simple as that"; it's a Kafkaesque nightmare of incomprehensible bureaucracy that defies all logic.

Just so you know, when a garnishment is issued, they track everything tied to your Social Security number, so it doesn't matter which bank you use.

I have never seen anything like that. In fact, the IRS employees act as if they are handling classified state secrets; they'll tell you the total amount causing the freeze and who initiated it, but even then, the info is often wrong. There are no official documents, no breakdown of costs... it’s absolutely absurd.

On that note, I'm wondering about protecting one's home. For instance, would transferring a house title to an offshore company actually work?

Honestly, your situation sounds absolutely wild.
Look, I know there are all kinds of incompetent bureaucrats out there, but the idea that nobody can unfreeze an account after everything's been paid off for years? Sorry, but I find that hard to swallow.

Because of my line of work, I deal with garnishments all the time. I have employees who've had liens from pretty much everyone and everything—total headaches, believe me—but never, ever has anyone been stuck with a frozen account long after settling their debt.

I've seen plenty of cases where people paid the court costs but didn't read the fine print or fail to submit proof of payment, so they ended up getting hit with a levy. But they always sorted it out by filing an appeal. This whole thing you're describing is just bizarre.

And this part about nobody knowing who's in charge of unblocking it? That's a little 🙄
to me. Of course they know. They're just being lazy. Clearly, some people just aren't doing their jobs.
Take it to the local news or blast it on social media and see how fast that account gets unfrozen.

Ryan Lopez85 said:Hey everyone... So, just like a bunch of other people out there, my checking account is totally frozen because of an ongoing garnishment, and I get my paycheck through a payroll card. On top of all that, I just joined an Avon campaign and they actually bumped me up to a leader position, which means I'm supposed to be getting $167 deposited into my account every month. But get this—they told me the FIN is going to snatch every single cent because apparently, since it isn't technically "wages," it’s fair game. Blah blah blah! I tried being smart and opened a separate checking account at the same place, Hypo, thinking I could shield some cash, but they basically told me they'll grab everything from there too. Like, seriously? I can't even save a third of my deposits?! Does anyone actually know how this works, and do they even have the legal right to pull this kind of crap? If they do, is there any way I can open an account at a completely different bank to dodge the seizure, or will Hypo just intercept it since all the banks are linked up now?? Thanks in advance!😉🙂

They're going to take it all. See, what Avon pays you isn't technically a salary or a pension; it's just "other income," and that stuff isn't protected by law.
If you look at the FINA website, they list exactly what counts as protected income (for example, they protect 2/3 of your wages or pension, and child benefits or disability payments are fully protected). Aside from those specific things, there might be a few other exceptions under special regulations, but "side hustle" money isn't one of them. Bottom line: your Avon money is fair game for the collectors.

Look on the bright side: you'll be paying off that debt faster this way. Isn't that actually what you want? Paying it off sooner so you aren't stuck drowning in interest for years?

An enforcement action through FINA hits every single cent you have. That means no matter which bank you run to, if you open an account, it's going to be frozen. There's no hiding.
Honestly, you could have avoided this whole mess much more easily if you had just sat down and worked out a payment plan with whoever you owe. Since you didn't reach a deal and didn't pay the debt, you ended up here. Once the debt is cleared, they'll unfreeze everything.
As simple as that!