Wiping the Slate Clean
Every year, thousands of refugees flee to the United States, seeking protection from the violence and persecution they face in their home country. Many mention their hope in finding a new life and a fresh start in the U.S.; they are excited to be able to give their children and family members a new place to call home. What they do not dream of are the difficulties they may face when they get here, like financial woes, hard-to-understand tax codes, or the language barriers that will make it hard for them to leverage the fresh start they’re hoping for in a successful way.
One such client came to Neighborhood Christian Legal Clinic in 2014, needing assistance with her taxes. Several years earlier, Asil Hedaya* fled to America with her husband to escape the violence in their home country. Together, they started a home cleaning business, but ultimately became tangled up in the tax code. Patrick Thomas, the Staff Attorney who worked with Asil, says, “No matter who you are—no matter what background you’re coming from—if you’re in the U.S. engaging in economic activity, you’re subject to the internal revenue laws, which are very complicated and hard to comply with. Especially for someone whose knowledge of English can be fairly limited or whose cultural knowledge is limited as well.”
This is exactly what happened to Asil. After attempting to pay their taxes on time, she and her husband encountered trouble navigating the system and ended up owing a lot of money they were unable to pay. In turn, this made it so that they were forced to earn less money than they otherwise would have through their business, which then made it impossible for them to afford the new taxes they owed. The problem compounded over the years, until eventually Asil and her husband owed nearly $30,000 to the IRS. The debt crippled them.
Enter Patrick, who worked tirelessly behind the scenes to help Asil and her husband resolve this untenable situation. He says, “Next to a bankruptcy, that’s one of the worst things that can appear on a credit report—a notice of federal tax lien.” After helping them to get everything in order, Patrick then filed an offer in compromise for $1 to settle the debt and to wipe the slate clean.
According to Patrick, there was very little pushback from the IRS and they soon accepted the offer. He says, “[The] federal tax lien was released, which means it’s no longer in existence. And the process we’re in right now is applying for that to be withdrawn … A better word for it might be ‘expunged’ because it will make it appear as though it never existed in the first place. And that will really help to build back credit and to build up [Asil’s] business.”
Thanks to Patrick and his efforts, Asil and her husband are finally able to pursue the fresh start they dreamed of for years. Pleased by the mercy of the resolution, Patrick says, “It highlights that there is forgiveness that can be had through our complex systems—you just have to navigate people to the right place.”
*Client name and details have been changed to protect client’s privacy