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The IRS really REALLY sucks

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Several years ago (March 30, 2010) I was laid off from IBM after 13 years. We were strapped hard in credit card debt (our own fault) & student loans. The separation package from IBM was very good. Very very good.

We had a plan, we talked with a *supposed* financial expert at our church (mistake #1) and decided we would use the severance package, my (slim) 401k, and my pension (mistakes #2, & #3) to negotiate with and pay off the credit card debit so that we could afford to live on one income.

We paid the extra taxes *they said* on the 401k and pension (THEY LIE .. they wanted SO much more at tax filing time!) and started calling the credit card companies. This was where we really (thought) we made out great. We called them, told them I lost my job, and would like to settle our debt. All banks (except for evil Bank of America) made a deal with us; some chopping our debt by like 70%! As long as we paid it immediately. So we did, closed out the accounts, and felt pretty damn great. And life went on. (and we stopped paying BOA, mutha-frickas)

So yeah, tax time came around, and we paid out the rear — still paying .. 2 years later, we’re still paying them … 400 bucks a month. It’s crippling.

BUT THEN …. just the other day … we get this letter from the IRS. They are informing us that we owe 2,100 MORE from our 2010 return. WHAT?? We went to a CPA! Long story short, the CPA says we paid what they said we didn’t, and he’d take care of it (I hope!)

But … what was it?? Are you ready for this?!?!?

If a credit card company FORGIVES YOU DEBT — you OWE TAXES on that NON-EXISTENT MONEY!

Are you KIDDING ME?!?!?! What? Do they view it as a ‘gift’?

In what world (well, besides OURS) does it make sense that you owe taxes on money that you neither earned nor were given? It’s fantasy money! But HEY, good ole Uncle Sam has to step in and decide that if I somehow benefit from any type of financial transaction … they must benefit MORE. Bastards. MUTHA-FRICKAHS!

I think if our president really wanted to help people that were laid off in this ‘great recession’ — they would’ve instituted emergency measures to remove the tax penalties on closing out retirement accounts when people lost their job.

We did this so we could SAVE OUR HOUSE.

So, in hindsight .. we should’ve

  1. talked to a real financial person – my church failed me hard on that one
  2. not cashed out retirement
  3. FILED BANKRUPTCY! OH my GOD! We would be no worse off had we done that, we would’ve been BETTER off — as my severance could’ve gone to student loans
  4. Oh, and going back MORE in hindsight, we should not have taken the ‘gradual increase’ in student loan payments after we graduated. 10 years later, I STILL owe the SAME PRINCIPLE! I had NO IDEA.

I should’ve been smashing my head into a wall long ago.