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Asked 489 days ago by a user from Big Rapids, MI
Please help me understand. For a few years now I've owed City Taxes for taking a Hardship Withdrawal from a 401K connected with my last employer. The hardship being I lost that job and had no income. Federal and State taxes weren't so great because they saw the reason as a "hardship." But this city seemed to see it as an opportunity to hit me hard for the early withdrawal.
Anyways, I haven't been able to pay this debt off due to low/no income for some time. The City recently took me to court again with an "Order to Appear and Produce." I had also recently been awarded Social Security Disability benefits. So I went into talk with this man (accountant) in charge of the matter to avoid the need to go to court. I took him documents showing how much I was now getting each month from SSD and offered to enter into a repayment agreement. He agreed, wrote up and signed an agreement where I was to pay $50.00 a month towards the debt. He then said he was going to court anyways for other cases on the date of our hearing, and he would submit our agreement to the court at that time.
The next thing I received was an "Order and Motion to Show Cause" for failing to appear at the hearing. Even though he had agreed to a repayment agreement, wrote it up and signed it, he never gave a copy to the court or told the court we had met. I went to the courthouse and presented them with a copy of the agreement with a written statement of my contacts with this man and my understanding of what they meant, and was advised to appear on the date of the Show Cause.
Well I went to the hearing before a Magistrate who didn't seem to care what I had to say about already having an agreement to avoid court, and what the City tax man had told me, and how I felt it was wrong to be "Show Caused." He just said to make sure and keep up payments with the agreement. And then he ordered me to pay an additional $20.00 that it had cost the City to file the show cause on me. He just didn't seem to care at all that I felt this was wrong and unjust.
So my question is just that. Am I wrong? Should I have not trusted the City tax man in the first place? Do I have to pay this additional $20.00 now or face possible jail as the Magistrate suggested? I would appreciate any help in understanding this outcome.