People can be sure of at least two things in America today: no one is recession-proof, and the Internal Revenue Service does not play favorites.
An IRS mortgage-fraud investigator of 25 years sought debt relief by filing for bankruptcy with her husband in December 2009. She fell into financial trouble when her husband’s restaurant enterprises got wiped out.
After the bankruptcy filing, one of the agent’s direct reports filed an internal whistle blower complaint alleging that she committed mortgage fraud. The agent and her family had lived mortgage-free for nearly two years in a half-million dollar home while she drew a six-figure income from the IRS. In addition, the agent held over $200,000 in a retirement account. Naturally, the bankruptcy filing, skipped mortgage payments and the retirement account balance raised eyebrows.
The IRS investigated the agent and her husband and found no wrongdoing. Bankruptcy records showed that they had two home loans with monthly mortgage payment obligations totaling nearly $4,700, compared to their average monthly income of less than $5,700. Moreover, banks have often been slow to foreclose due to the overwhelming number of foreclosures, the hindering effects of government-imposed, foreclosure suspensions and delays caused by the “robo-signing” scandal. Consequently, many people have been able to live in their own homes for a year or more without making a mortgage payment before being evicted.
The agent and her husband eventually sold their home by short-sale, the bank withdrew foreclosure, and their bankruptcy was discharged in November 2010. The agent still works for the IRS and her husband is working for a restaurant chain. They are slowly recovering after obtaining debt relief in bankruptcy court.
The economy affects everyone, even IRS agents who are expected to meet their financial obligations as much as anyone else. A bankruptcy attorney can help people like the IRS agent and her husband get a fresh financial start.
Source: FOXBusiness, “The IRS Agent Who Squatted in Her House,” Al Lewis, Aug. 17, 2012