HELP!!! I need some advice!

[EhhMon]

This is TSP related, but I wasn't sure where to post it.

In short. I made a TSP loan (Real Estate) back in 2009. Got a house, monthly payments were coming out of my paycheck, and everything seemed perfect.

Fast forward to May of 2011. I find out, that my Payroll office screwed up and mistakenly stopped making payments back to TSP on Dec of 2010.

I tried to appeal it, but I was denied, because TSP had already wrote it off. Meaning I had to pay taxes on what I borrowed. I no longer owe the money back to TSP, so I have pay taxes to the IRS.

Is there anyway I can fight this? I'm having to pay back $14,000 back (which also includes fees and penalties).

Let me give some background:

1. When I first found out I got the house, I immediately did a change of address to all my accounts (include TSP) to the new residence.
2. I found out later, that the town I moved into, doesn't accept mail at the residence, you have to use the post office to send and pick up mail.
3. After the payroll fiasco I discovered, I realized I hadn't changed my TSP account to the Post Office box. (so I never got the notices from TSP).
4. This was my 3 TSP loan. I've never had any problems paying back the previous two loans, which probably made me complacent about monitoring this last loan.

What can I do? Am I stuck having to pay all these taxes back? I don't have a problem paying it back, its just that it wasn't my fault.

Any advice!?

 

[Intrepid_Timer]

Have you talked with the IRS? They are actually quite helpful and aren't out to screw everyone, like some think. You might ask them, and TSP as well, if you can make a lump sum deposit for the funds that were mistakenly not going into your TSP, if you have it, in order to avoid the taxes. This might be easier if you are over 50. If nothing else, that would also allow you to deduct that amount from this year's taxes and use that to pay off what you owe.

Good luck!

 

[uscfanhawaii]

Agree with IT! I have had dealings with the IRS lately, and tho they are still slow, they ARE trying to help in cases such as yours. I also think you need to get in touch with TSP folks. Maybe they can give you a new loan since the last was closed no fault of your own. Then you can square things with the IRS.

Good Luck! And don't just take the first 'No' for an answer. (Ask for the supervisor.) You deserve a fair shake in this fiasco!

 

[Bronco07]

Ehhmon,
When your payroll office stopped making payments to your TSP Real Estate loan in Dec 2010 where did the funds go?

 

[EhhMon]

Thanks Intrepi Time and uscfanhawaii. I will try that after the holidays. I just found out that Christmas Eve (Monday) is now a holiday. So have to wait unitl Wednesday.

Bronco07, the payments that were suppose to come out of my check was suppose to go back into repaying my Real Estate TSP loan.

Meanwhile TSP had sent me letters concerning this matter, but they were sending it to the "physical address" which I gave them. The people at the Post Office weren't (for some reason) forwarding the mail to my PO Box.

It is a new community in the area and from what I gather from my neighbors, they too had similar issues concerning the mail. The post master at the post office was having issues with the new residents not properly forwarding mail to the PO boxes instead of the physical address. I had tried to avoid that and thought I changed all my addresses to the PO box (instead of the physical address), but I missed making those changes to my TSP account.

I spoke with a rep from TSP and she was the one who told me that the mail they sent me, was being returned. That's how I found out that I had forgotten to change my mailing address on my account to the PO Box vice the Physical address.