2011 Taxes: IRS Liens Nightmare -- Know Your Rights Before the Deadline

April 12, 2011 — -- Heather Bindbeutel is at her wit's end with the Internal Revenue Service: "They are just driving me crazy. I don't understand it. I paid it."

What she paid: a $3,400 debt. She says she has the paperwork to prove it, but the IRS disagreed and filed a tax lien against her. The IRS even withdrew $5,500 for the original $3,400 plus interest over nine months from her bank account.

"I'm like, 'Why are you garnishing my account? You have the money. In fact, you have it twice,'" Bindbeutel said. "[But] nobody can find the money."

"If you do not know your rights, it can feel like you are being run over," said Nina Olson, at the Taxpayer Advocate Service, a government agency that helps taxpayers when they face problems with the IRS.

Last year, the advocacy service handled 300,000 cases of taxpayers who had an unhappy experience with the IRS. Although Olson's agency examined Bindbeutel's case and said she was right, the IRS has yet to pay her back.

Bindbeutel said that an IRS agent came to her house twice looking for a payment -- once before removing funds from her bank account and then afterward. The second time, the IRS wanted $7,000 to cover the original debt and additional interest and penalties.

"The harassment wouldn't stop," Bindbeutel said. "They kept calling me. They'd show up at my house. They would send letters saying I owe money."

Her tax lawyer, Paul Spizzirris, said that the IRS acted more like a bully than a government agency, and that its heavy-handed tactics caused real harm.

"They're a bully," he said. "The IRS is a bully. ... Pushing around a young ... mom trying to make her way in a recession with a small business and one employee, which is her."